Last Thursday, the ECB (European Central Bank) left its monetary policy and interest rates unchanged. “The Governing Council continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases,” the ECB said in a statement on Thursday. The Euro tumbled against the dollar following comments from ECB President Mario Draghi, who said policy makers had not discussed either extending the bond buying program or tapering the size of asset purchase. Adding on, he said that any decision about the ECB’s policy stance would be left until December.
Meanwhile, as widely expected, the Bank of Canada maintained interest rates at 0.5% on Wednesday. The loonie weakened across the board when BOC Governor Stephen Poloz noted that the Bank had discussed stimulus at their meeting. Disappointing retail sales data released on Friday added on to the selling of the loonie against the greenback.
The greenback remained strong backed by firm hawkishness of the Federal Reserve and favorable odds of a December rate hike.
EUR/AUD – Sell at break-out if price forms a pennant with a 3rd point.
XAU/USD (Gold) – Breakout. Gold retracing after massive sell-off. Possible long at break of trend line.
EUR/JPY – Bearish. We expect the Euro dollar to continue trending downwards. Possible short at immediate resistance: 113.20
Top News This Week (GMT+8 time zone)
US: CB Consumer Confidence. Tuesday 25th October, 10pm.
We expect figures to come in at 103 (previous figure was 104.1).
US: Unemployment Claims. Thursday 27th October, 8.30pm.
We expect figures to come in at 255K (previous figure was 260K).
Fullerton Markets Research Team
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