Daily Analysis
EUR/USD What a day for the Euro! The single currency took a substantial hit after Draghi announced benchmark rate cuts (now at the “lower bound”, i.e. we shouldn’t see lower rates) across the board (overnight bank deposit rates now at NEGATIVE 0.2%!), and the beginning of a new QE program to purchase covered bonds (though Draghi shies away from calling it “QE” a rose by any other name would smell as sweet). These extremely dovish measures, brought about by persistent low inflation and increased downside risks to the Euro zone stability, have had the effect of sending the Euro in a death spiral, falling over 200 pips since the announcements and over 1000 pips since May.
Tecnhically speaking this is just another bearish extension to an already bearish trend and, while that bearish trend still lives on, the selling is so exhausted we will not chase further declines here. 1.28-1.2750 is the next STRONG daily support – the 2013 lows.
Our Preferred Trades*: Given how exhausted this drop is, meaning prone to a bullish correction, and how strong the bearish trend is – two very conflicting signals, we will most likely stay flat today, though we will watch the candlestick signals for a firm sign in either direction. If we were getting long we would look near 1.29, a large round number likely to bring about bids, and if we were looking to sell it would be on a rally near 1.30.
Yesterday’s EUR/USD SwingPRO Signal Result: No trades triggered yesterday – our sell zone near 1.32 was not reached.
Today’s SwingPRO Signal: Flat on mixed techs, see preferred trade above.
*CandlePRO: CandlePRO can be used in conjunction with our daily analysis and “our preferred trades.” For example, if we prefer “going short” or “selling a rally” then we would look for bearish candlestick signals after a rally or near resistance levels. Alternative if we prefer “going long” or “buying a dip” then we would look for bullish candlestick signals on price drops or near support levels.
Today’s Important News Events:
| Date | Time (UTC) | Event | Actual | Forecast | Previous |
|---|---|---|---|---|---|
| Thu Sep 4 |
01:30 | AUD Retail Sales s.a. (MoM) (JUL) | 0.4% | 0.4% | 0.6% |
| 01:30 | AUD Trade Balance (Australian dollar) (JUL) | -1359M | -1750M | -1564M | |
| 06:00 | EUR German Factory Orders n.s.a. (YoY) (JUL) | 4.9% | 1.1% | -2.0% | |
| 06:30 | Bank of Japan Governor Kuroda Gives Monetary Policy Statement | ||||
| 07:30 | EUR Markit Germany Construction PMI (AUG) | 47.7 | 48.2 | ||
| 08:10 | EUR Markit Eurozone Retail PMI (AUG) | 45.8 | 47.6 | ||
| 08:10 | EUR Markit Germany Retail PMI (AUG) | 49.4 | 52.1 | ||
| 11:00 | GBP BOE Asset Purchase Target (SEP) | 375B | 375B | 375B | |
| 11:00 | GBP Bank of England Rate Decision (SEP 4) | 0.50% | 0.50% | 0.50% | |
| 11:45 | EUR European Central Bank Rate Decision (SEP 4) | 0.05% | 0.15% | 0.15% | |
| 11:45 | EUR ECB Deposit Facility Rate (SEP 4) | -0.20% | -0.10% | -0.10% | |
| 11:45 | EUR ECB Marginal Lending Facility (SEP 4) | 0.30% | 0.40% | 0.40% | |
| 12:15 | USD ADP Employment Change (AUG) | 204K | 220K | 218K | |
| 12:30 | EUR ECB’s Draghi Holds Press Conference After Rate Decision | ||||
| 12:30 | USD Continuing Claims (AUG 23) | 2464K | 2510K | 2528K | |
| 12:30 | USD Initial Jobless Claims (AUG 30) | 302K | 300K | 298K | |
| 12:30 | USD Trade Balance (JUL) | -$40.5B | -$42.4B | -$40.8B | |
| 14:00 | USD ISM Non-Manufacutring Composite (AUG) | 59.6 | 57.7 | 58.7 | |
| 23:30 | AUD AiG Performance of Construction Index (AUG) | 52.6 |