Eur/usd - page 202
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German IFO Business Climate rises to 105.5 as expected – sell opportunity on EUR/USD?
No surprises from Germany’s highly regarded IFO business climate: it advanced for a second month in a row to 105.5 points, within expectations. Current conditions stand at 110.1 points, also as expected.
EUR/USD is ticking marginally higher.
The German IFO Business Climate was expected to move up, showing more confidence in Germany in the month of December just like the ZEW showed us not too long ago. The headline figure was predicted to reach 105.6 points. It stood on 104.7 last month.
A good figure may already be priced in.
EUR/USD traded around 1.2325 before the publication. It bounced from the lows it dropped to on the Swiss decision to set a negative deposit rate.
The euro is generally lower after Yellen offered hawkish words.
It’s important to remember that the ECB is on track to launch a QE program in January. So, any German related strength could be a sell opportunity.
The EUR / USD sank yesterday after the comments to the Wall Street Journal from the member of the Executive Council of the ECB, Benoit Coeuré where suggested that the ECB was prepared to embark on large-scale purchases of assets centered in government bonds.
R3 - 1.26596
R2 - 1.25874
R1 - 1.24639
Daily Std. Pivot - 1.23917
S1 - 1.22682
S2 - 1.21960
S3 - 1.20725
the only support level left to break is the year's low let's see if the price will fall to 1.2200 before the end of the year
With inflation data coming in lower than expected and the USD as strong as it has been in years it is no wonder that the Fed feels no immediate pressure to begin raising rates.
Technically all of this folds in nicely with the long-term downtrend we have been watching, brought about by the bullish USD forecast and the dovish EUR forecasts.
Yesterday’s massive drop below 1.24 brought above 1.23, as expected, and then some as price is currently sitting at 1.2280.
Why Germany's having a merrier Christmas
Christmas in Germany will be that little bit merrier this year as positive business and consumer confidence points to a much-needed turnaround for the euro zone's largest economy -- one that veered dangerously close to recession just months ago.
German consumer sentiment hits its highest level in eight years heading into January, according to the forward-looking consumer sentiment survey released Friday.
Market research group GfK said its consumer climate indicator, based on a survey of around 2,000 Germans, forecast a rise to 9.0 in January, from 8.7 in December.
"Evidently consumers currently assume that the phase of economic weakness in Germany will be temporary and are expecting their domestic economy to return to growth over the coming months," GfK said in a statement.
A return to confidence in the euro zone's largest economy is a point of celebration not just for Germany, but for the entire euro zone, mired as it is in a low-growth environment. Germany's economy had appeared remarkably robust since the economic crisis hit the region with a vengeance in 2009 but had shown some worrying signs of slowing down this year as its exports to Russia suffered following the West sanctions over Ukraine.
read more
Although there have been few news or events during the day, the foreign exchange market noted some relevant movements however the EURUSD was stable.
The German PPI for November fell though at a slower pace than in the previous month.
However, the risk of deflation in the largest economy in the euro zone still exists.
R3 - 1.24227
R2 - 1.23874
R1 - 1.23360
Daily Std. Pivot - 1.23007
S1 - 1.22493
S2 - 1.22140
S3 - 1.21626
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thank you for the news
EUR/USD forecast for the week of December 22, 2014
The EUR/USD pair tried to break above the 1.25 level during the week, but then turned back around to break down towards the 1.22 handle. Because of this, we feel that the longer-term downtrend is going to continue and that rallies will continue to be selling opportunities. However, this is Christmas weeks ago expect a lot in the way of movement has more than likely the market will be fairly stagnant. With that being the case though, we have no interest in buying this market and think that eventually it should continue to fall.
source
ECB's Coene supports government bond purchases
The European Central Bank should start buying government bonds to tackle poor investor confidence and low inflation in the euro zone, governing council member Luc Coene said in an interview published on Saturday.
The Belgian central bank chief said the bank had already waited too long, and that this could be one tool to spur economic activity in the 18-country euro zone and fight off deflationary pressures.
"In this context, the purchase of sovereign bonds could prove to be an effective tool," he told La Libre Belgique.
"Since the beginning of 2014, we have systematically underestimated deflationary effects...if we were to find ourselves at the beginning of next year with negative inflation and fall into a deflationary spiral, the effects on the behavior of households and businesses could be very negative."
Inflation in the single currency area was 0.3 percent year-on-year in November, well below the ECB's headline target of inflation below, but close to 2 percent.
The ECB Governing Council will hold its next policy meeting on Jan. 22.
source
EUR/USD rises off 2-year lows, but gains capped
The euro rose against the U.S. dollar on Monday, pulling away from a two-year low but gains were expected to remain limited by disappointing German import data and as demand for the greenback continued to be broadly supported.
EUR/USD hit 1.2264 during late Asian trade, the session high; the pair subsequently consolidated at 1.2259, rising 0.25%.
The pair was likely to find support at 1.2132 and resistance at 1.2353, the high of December 18.
Earlier Monday, official data showed that German import prices dropped 0.8% in November, compared to expectations for a 0.5% loss, after a 0.3% downtick in October.
Meanwhile, the dollar continued to be underpinned after the Federal Reserve said last week that it would be "patient" before raising rates, guidance which it said is consistent with earlier assurances statement that rates would stay low "for a considerable time."
The central bank also acknowledged the improvement in the U.S. labor market and noted that the economy is making progress toward its goals in inflation and employment.
The euro was higher against the pound, with EUR/GBP adding 0.12% to 0.7833.
Trading volumes were expected to remain light on Monday, ahead of the Christmas Day Holiday.