Morning Preview: Euro Tumbles and the USD Keeps Charging
Rowan Crosby • 1 min read
Well that was a huge trading session to say the least. Finally we got some action out of the ECB as President Mario Draghi told us that while interest rates will remain unchanged, bond purchases will be halved. This put the Euro under all sorts of pressure and we finally smashed through support at 1.1700.
The majors were all under pressure for the most part with the AUD and NZD both continuing to sell-off hard. Although the USD/JPY, for all the US Dollar strength, just couldn’t seem to rally and still can’t break above the important resistance level at 114.00. The CAD and GBP were also weaker against the Greenback.
Now that the USD has really broken out above 94.00, there’s not much standing in the way of it taking out the next major level, which appears to be 95.00.
That means that there is more pain to come for the majors.
US Dollar Index (DXY) – 240 min Chart.
Top Pairs to Trade
I like the look of the AUD/USD and NZD/USD, as they have really established a big trend, and are falling for fundamental reasons, not just because of USD strength. I suspect there is more downside to come in both and I will be taking a closer look at opportunities in both.
Economic Data Today
The main event on the radar for all traders today is US GDP. Even though we’ve got some strong momentum, we can easily give that up with a poor number here. Today will be all about how the USD reacts and if the Euro can respond.
Good trading guys.