Talking Forex: EUR/USD Finished Trade Session Higher

EUR/USD
The pair finished the session higher after Draghi failed to indicate that the ECB will implement more liquidity boosting measures, which also resulted in an aggressive bear steepening of the Euribor curve. EUR was also supported by the fact that even though the central bank cut its inflation forecast for 2013 and 2014, it raised growth forecasts for next year. Consequent EUR strength saw the EUR/GBP top the 10DMA line and then the 21DMA lines. Also of note, the head of the central bank said that the governing council discussed negative deposit rate briefly and that the ECB is technically ready for negative deposit rates, however discussion on negative deposit rate did not touch on technical detail. In terms of technical levels, supports are seen at 1.3525/15 and then at 1.3500. On the other hand, resistance levels are noted at 1.3677/96 and then at 1.3739.

GBP/USD
Broad based EUR strength which stemmed from the fact that the head of the ECB did not indicate that the central bank will carry out another LTRO in the very near future, which in turn resulted in the EUR/GBP advancing above the 21DMA line ensured that the pair finished the session lower. Just like the ECB, the BoE also refrained from changing its key borrowing rate, while UK Chancellor Osborne who presented the Autumn budget failed to surprise markets and confirmed that the OBR sees better growth prospects in 2013/14, as noted by over the weekend. Technical studies indicate that supports are seen at 1.6277/60 and then at 1.6198. On the other hand, resistance levels are seen at 1.6437/43 and then at 1.6455.

USD/JPY
Despite the surge by the EUR/JPY amid broad based EUR strength, the pair settled higher as market participants booked profits following the latest surge by the pair and also positioned for the eagerly awaited jobs report by the BLS. In terms of Japan specific commentary, it was reported citing sources that Japan's government expects stimulus package to be approved by Cabinet which will lift real GDP by around 1% and create 250,000 jobs.