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28 Dec 2015
EUR/USD: consolidated below the key 1.10 handle
FXStreet (Guatemala) - EUR/USD is a marginal bid in thin markets at the start of this week. We have little on the agenda with most of Europe out on a bank holiday post the weekend boxing day.
The build-up to 2016 was dramatic in expectations, but a let down in actual events. The Fed did what they had to do and the market had priced that in already. The ECB was however, a fiasco, and actions were poorly communicated so this was more of an event than the long awaited FOMC in fact.
So, we will stay with expectations of easing from the ECB, but it seems it will not come so soon as expected while the Fed might find that their requirement of normalising monetary policy will be even more gradual than forecasted in the event of a stagnant recovery in the US. There are many opposing variables such as El Niño, China and a strong dollar in a bad manufacturing environment with plenty of slack in the jobs sector still.
EUR/USD levels
Technically, Valeria Bednarik, chief analyst at FXStreet explained that the 4 hours chart presents a slightly bullish tone, "As despite the price is developing above a bullish 20 SMA, the Momentum indicator holds flat right above its 100 level, indicating not enough upward strength at the time being". On the daily chart, there is some work to do towards the 200 DMA at 1.043 as a pivotal point. Below where, the bearish dominance prevails. 1.0563 is key downside target.
The build-up to 2016 was dramatic in expectations, but a let down in actual events. The Fed did what they had to do and the market had priced that in already. The ECB was however, a fiasco, and actions were poorly communicated so this was more of an event than the long awaited FOMC in fact.
So, we will stay with expectations of easing from the ECB, but it seems it will not come so soon as expected while the Fed might find that their requirement of normalising monetary policy will be even more gradual than forecasted in the event of a stagnant recovery in the US. There are many opposing variables such as El Niño, China and a strong dollar in a bad manufacturing environment with plenty of slack in the jobs sector still.
EUR/USD levels
Technically, Valeria Bednarik, chief analyst at FXStreet explained that the 4 hours chart presents a slightly bullish tone, "As despite the price is developing above a bullish 20 SMA, the Momentum indicator holds flat right above its 100 level, indicating not enough upward strength at the time being". On the daily chart, there is some work to do towards the 200 DMA at 1.043 as a pivotal point. Below where, the bearish dominance prevails. 1.0563 is key downside target.