EUR and GBP Crushed by ECB and BoE

While most Americans are off enjoying their July 4th holiday, big moves are happening in the FX market. The euro and British pound dropped to 5 week lows against the U.S. dollar, taking out key levels in the process. The absence of U.S. traders most likely compounded the volatility in currencies. The European Central Bank and the Bank of England left monetary policy unchanged but Mario Draghi and Mark Carney made it clear that both central banks have a bias to ease. The dovish comments from European central bankers were motivated by the recent volatility in interest rates and a desire to set themselves apart from the Federal Reserve who is on a path to reduce stimulus. The ECB and the BoE wants everyone to know that they are still prepared to increase stimulus if the volatility in the bond markets persist or their economies weaken.


In the Eurozone in particular, the EUR/USD dropped through 1.30 and 1.29. The currency started to fall as soon as Draghi said that policy will remains accommodative as long as needed, there are downside risks to their economic outlook and rates will stay low for an extended period of time. The sell-off gained momentum when the central bank took the unprecedented step of forward guidance. The ECB said there is no exit in sight, they are keeping rates low for an extended period of time, their decision will be data dependent and they are keeping an open mind on negative deposit rates. Draghi also reminded everyone that the central bank is "technically ready" for negative rates. They had an extensive discussion about the possibility of a rate cut and unanimously decided that the guidance was needed which included saying that 50bp is not the lower bound. The central bank is screaming their bias to ease from the top of the mountain - they don't want to leave any room for ambiguity because the risk could be a further rise in yields. Having dropped below 1.29, the next support for the EUR/USD should be at 1.28.

EUR and GBP Crushed by ECB and BoE

EURUSD DAILY 29TH MAY 2013

EURUSD has formed head and shoulder pattern  with neckline 

i feel  as per Elliot wave, Pair has finished corrective wave ABC and developed new impulsive 

pair has support @1.2740 & 1.27  which is remained historic strong level and also neckline in this pattern

if pair breaks this neckline then it may test 1.204 , last year low 

Dear friends i know this level will not achieve in one single wave 

EURUSD 27th May 2013

EurUsd  has formed head and shoulder pattern above moving average 50- period

it has neckline as well as support @1.29 

Pair has strong resistance 1.2980 where Fibonacci retracement 23.6 %

if pair breaks below neckline then pair will move to the 1.2820 level 

EURUSD has bearish emgulfing pattern

EURUSD has formed bearish emgulfing pattern above 50 SMA 

Pair is rejecting from level 50% fibbonacci retracement

resistance @1.3140 & 1.3208  support @1.2980  &1.29 1.2840

if Pair breaks 1.30  then pair may test next given support

   

EURUSD HAS PIN BAR SETUP

EURUSD has formed pin bar setup in daily charts 
pair has showing rejection from level 1.3200 50% retracement ( as shown in charts)

resitance @1.3200 and support@ 1.3120 & 1.3050

AUDUSD HAS EVENING STAR

AUDUSD HAS FORMED EVENING STAR   DAILY CHARTS 

PAIR IS BELOW 50 PERIOD MOVING AVERAGE  PAIR IS VOLATILE MOVING   

IT HAS ALREADY BROKEN CONFIRMATION LEVEL 

 On downside   pair is targeting towards 1.01 & 1.0050

EURUSD HAS FORMED HEAD AND SHOULDER PATTERN

EURUSD  has formed Heads and shoulder pattern with neckline @1.300
Pair is currently consolidated above 50 Period moving average @1.2995

Also pair is showing retraced from level 50%

Downside
if Pair breaks below 1.30( neckline) then Pair may test next support @1.29 &1.2840

Upside
if Pair  breaks above 1.3130 then it may find resistance @1.3220 & 1.3350

Recommend

Sell below 1.3  target @1.2850 &1.2740