EUR/USD Price Forecast – EUR/USD On Bearish Consolidation Move
The focus is on the Eurozone inflation numbers and the US employment cost index, scheduled for release at 10:00 GMT and 12:30 GMT, respectively.
The sentiment is quite bearish as the EUR posted losses yesterday, despite strong German inflation. The bears may feel emboldened if the pair ends today below the 50-month SMA of 1.1396. As of writing this article, EURUSD pair is trading near flat at 1.1343 down by 0.01% on the day, below the 50-month simple moving average (SMA) of 1.1396 as investor focus shifts to Eurozone inflation numbers and the US employment cost index updates scheduled to release later today. Risk assets across the world put in for a speculative bounce this past session, but the effort leaves very limited conviction that this is a move that can readily take the helm. In the last five months, the dips below the SMA have been short-lived. Hence, it is the key level to beat for the bears.
Positive US Macro Data Likely To Push EURO to 1.12 Handle
Should the pair close below the 50-month SMA today, then the bears will likely feel emboldened resulting in an even sharp sell-off which would be positive for US Greenback. The EUR/USD pair now seems to have entered a bearish consolidation phase and was seen oscillating in a narrow trading range, just below mid-1.1300’s through the Asian session on Wednesday. The bearish case may strengthen further if the US employment cost index beats estimates, signaling a pick-up in wage-price inflation. An above-forecast Eurozone CPI may offer some relief, however for the EUR to find bids, the US employment cost index needs to miss estimates by a big margin. Meanwhile, a strong follow-through US Dollar buying interest, thanks to the US President Donald Trump’s positive comments over a possible trade deal with China, exerted some additional downward pressure through Tuesday’s trading session.
When looking from technical perspective,. Bearish traders now look for a sustained weakness through the 1.1335 immediate horizontal support, below which the pair is likely to accelerate the fall towards YTD lows, around the 1.1300 handle. A follow-through selling has the potential to continue dragging the pair further towards the 1.1270-65 region, support marked by the lower end of a short-term descending trend-channel formation on the 4-hourly chart. On the flip side, any meaningful recovery attempt might now confront fresh supply near the 1.1375 region, trend-channel resistance, above which a bout of short-covering could lift the pair beyond the 1.1400 handle towards its next hurdle near the 1.1430 area.
USD/JPY: No Response to the Status Quo BOJ
- The Bank of Japan (BOJ) kept the interest rates and other policy tools unchanged.
- The status quo decision has so far not had any impact on the USD/JPY pair.
- The currency pair’s close above 112.89 amid risk-on in the equities put the bulls back in a commanding position.
The USD/JPY is seeing little action after the status quo BOJ decision.
The Japanese central bank voted 8 to 1 to leave unchanged its pledge to increase the monetary base at an annualized pace of JPY 80 trillion.
Further, it voted 7 to 2 to keep interest rates unchanged and also made no changes to forward guidance, adopted in July that pledges to keep interest rates extremely low for an extended period.
However, its quarterly report said that risks to price outlook are skewed to the downside and the effects of sales tax hike pose risks to the BOJ’s baseline scenario. It also cited protectionism as a risk to the economic outlook.
So, it seems safe to say that the BOJ is unlikely to move the needle on interest rates or QE program any time soon. Hence, for the USD/JPY, the path of least resistance is on the higher side.
Technically speaking, the pair is looking north, having closed above 112.89 yesterday. At press time, the currency pair is trading at 113.20, having clocked a three-week high of 113.33 earlier today.
USD/JPY Technical Levels
- Last Price: 113.19
- Daily change: 6.0 pips
- Daily change: 0.0530%
- Daily Open: 113.13
- Daily SMA20: 112.69
- Daily SMA50: 112.23
- Daily SMA100: 111.63
- Daily SMA200: 109.88
- Daily High: 113.13
- Daily Low: 112.3
- Weekly High: 112.9
- Weekly Low: 111.38
- Monthly High: 113.71
- Monthly Low: 110.38
- Daily Fibonacci 38.2%: 112.81
- Daily Fibonacci 61.8%: 112.62
- Daily Pivot Point S1: 112.57
- Daily Pivot Point S2: 112.01
- Daily Pivot Point S3: 111.73
- Daily Pivot Point R1: 113.41
- Daily Pivot Point R2: 113.69
- Daily Pivot Point R3: 114.25
Stock Market News
Facebook Expects Rising Costs to Combat Scandals to Moderate After 2019
Facebook Inc (FB.O) on Tuesday relieved investors by forecasting that margins would stop shrinking after 2019 as costs from scandals ease up, sending shares up despite a second-straight quarter with record-low user growth.
Chief Executive Mark Zuckerberg repeated the company’s warning that growing user interest in private messaging, video and safer content would cause costs to rise faster than revenue for “some time.” But he said he was focused on bringing them in line.
That same guidance three months ago sparked Facebook’s biggest one-day sell-off as some investors braced for dire results. The third-quarter performance and revised guidance suggested that the downward trend would be more gradual and taper off after 2019, financial analysts said.
Shares of Facebook traded up about 3 percent after updating its forecast. They reversed course several times, falling and gaining as much as 5 percent, during an hour of volatility after closing on Tuesday up 2.9 percent at $146.22.
Facebook, Amazon.com Inc (AMZN.O) and Google parent Alphabet Inc (GOOGL.O) had suffered a battering over the last month on Wall Street after leading a years-long rally. Slowing growth has been a top concern, and Facebook’s weak results did not squash those fears.
EBay Beats Quarterly Profit on Cost Cut Efforts, Shares Rise
EBay Inc (EBAY.O) beat analysts’ estimates for third-quarter profit by managing costs at a time when bigger rival Amazon.com Inc (AMZN.O) missed revenue estimates and forecast sales below expectations for the holiday quarter.
Shares of EBay, which also expects fourth-quarter profit marginally above analysts’ estimates, rose as much as 6.0 percent in after-hours trading. The shares have fallen 27 percent so far in 2018.
The San Jose, California-based company has been splurging on product developments, brand marketing and making its website more user-friendly to better compete with increased competition in the online shopping sphere, while also cutting jobs to rein in costs.
“Effective expenses management has resulted in consistent EPS upside,” said D.A. Davidson & Co analyst Thomas Forte.
EBay’s initiatives like grouped listings that let buyers see all identical items grouped together, personal recommendations, and a simplified payment process have also helped lure more online shoppers. The company said it had 177 million active buyers in the third quarter, compared to 175 million in the second.
Slight Slump in Markets Continues, Ethereum Trades Below $200
Crypto markets are mostly trading sideways after the recent drop-off that took place on Monday, Oct. 29. The top 20 cryptocurrencies by market cap are seeing mixed signals with insufficient fluctuations, with total market capitalization hovering around $203 billion.
After dipping below the $6,400 threshold yesterday, Bitcoin (BTC) has been trading around $6,330 for the most part of the day. As of press time, the major cryptocurrency is slightly down 0.13 percent, and is trading at $6,299, with an intraday high of $6,364.
Ethereum (ETH) is down around 0.27 percent over the past 24 hours, trading at $196 at press time. The second cryptocurrency by market cap dipped below the $200 price point yesterday, and has since been hovering around the same levels. Recently, Cointelegraph reported that the Ethereum Enterprise Alliance (EEA) released new standard specifications for developers using the Ethereum blockchain.
In contrast, Ripple (XRP), the third top cryptocurrency by market cap, has seen a slight rebound after yesterday’s sell-off. At press time, the coin is up around 0.6 percent, and is trading at $0.442. On the week, Ripple is down around 1.4 percent.
After dropping to as low as $201 billion yesterday, total market cap has been hovering around $203 billion for the most part of the day, amounting to $202.8 billion at press time.
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