{"id":64044,"date":"2014-11-21T07:24:41","date_gmt":"2014-11-21T12:24:41","guid":{"rendered":"http:\/\/countingpips.com\/?p=64044"},"modified":"2014-11-21T07:56:35","modified_gmt":"2014-11-21T12:56:35","slug":"euro-poised-to-test-new-lows-following-surprise-central-bank-activity","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/11\/euro-poised-to-test-new-lows-following-surprise-central-bank-activity\/","title":{"rendered":"Euro Poised to Test New Lows Following Surprise Central Bank Activity"},"content":{"rendered":"
November 21, 2014<\/div>
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Article by ForexTime<\/a><\/p>\n

The Euro dropped and is poised to test the November lows, after dovish comments by Draghi generated headwinds for the European currency.\u00a0 In addition, the Peoples Bank of China surprised market participants with a rate cut that gave a boost to riskier assets.\u00a0 The dollar continues to gain traction as the interest rate differential between the US and Europe continues to move in the greenbacks favor.<\/p>\n

Draghi<\/span> boosted markets, focusing on inflation.\u00a0 He said that the ECB will do what it must to raise inflation as fast as possible, adding that some inflation expectations are excessively low. Dovish comments, with Draghi also saying<\/span> that the ECB would broaden purchases if the current policy is not effective and that QE in Japan and the U.S. has<\/span> led to significant forex depreciation.<\/p>\n

China\u2019s Peoples Bank of China unexpectedly cut interest rates, slashing one-year lending rate by 40 basis points and the one-year deposit rate by 25 basis points. The move has a similar shock impact as the BoJ\u2019s<\/span> unexpected expansion of its QE program had last month, and likely reflects Chinese policymakers\u2019<\/span> determination to keep growth above 7.0% year over year.<\/p>\n

The news of the Chinese rate cut boosted global equity bourses<\/span>, and helped the Aussie dollar gain traction.\u00a0 The Euro was weighed down by the comments by Draghi as well as technical selling which is pushing the currency pair closer to support levels.<\/p>\n

Target support on the currency pair is seen near the November lows at 1.2375, while short term resistance is seen near the recent highs at 1.26.\u00a0 Short term momentum has turned negative as the MACD (moving average convergence divergence) index generated a sell signal.\u00a0 This occurs when the spread (the 5-day moving average minus the 13-day moving average) crosses below the 6-day moving average of the spread.\u00a0 Additionally, the RSI (relative strength index) moved lower with price action reflecting accelerating negative momentum.<\/p>

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\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

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Article by ForexTime The Euro dropped and is poised to test the November lows, after dovish comments by Draghi generated headwinds for the European currency.\u00a0 In addition, the Peoples Bank of China surprised market participants with a rate cut that gave a boost to riskier assets.\u00a0 The dollar continues to gain traction as the interest […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-64044","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/64044","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=64044"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/64044\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=64044"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=64044"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=64044"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}