Last week, the euro came under the pressure from significant sales after the ECB cut its benchmark interest rate to the record low of 0.05% to 0.15%, thus having surprised many market analysts who did not expect any changes. In addition, the ECB President Mario Draghi said the bank intended to launch the program for the asset-backed securities buying to acquire the non-financial assets, including the mortgage-backed bonds.
We advise to trade down with the first target 1.2920. In the case of overcoming the target with shorts the next target is 1.2700.
The pound/dollar will consolidate with a tendency to decrease after the Friday morning it reached a 7-month low of 1.6300. The pair dynamics may be affected by the USA employment data. The Bank of England, as expected, left its interest rate at the record low of 0.5% while the volume bond-buying program reached 375 billion pounds.
We advise to short with the first target 1.6320. After overcoming the target the next one is 1.6100.
The yen fell against the dollar. The Bank of Japan head Kuroda said that the monetary policy liberalization had given the desired effect. The yen decline is caused by the Bank of Japan steady liquidity stream which is currently the main cheap money supplier into the global markets.
We advise to buy first to the 106.00 mark. The next target is 107.80.