The EUR/USD is again under pressure
The US positive news has put pressure on the euro and then the ECB President Mario Draghi stated that the bank's management would unanimously support further softening measures if it was necessary and the inflation growth would be ensured from the current low levels. The positive report about the US labor market is another additional factor that led to the euro weakness. The unemployment rate fell to an eight-year low, indicating the US economic recovery.
We advise to long with the first target – 1.2790. When the pair consolidates above the first target, we can start a deal to the level of 1.2860.
We expected the Bank of England decision to leave the interest rates and the asset purchase program values unchanged, so the traders’ reaction was rather weak to this event. In general, the negative sentiment towards the British pound is not quite clear at this stage, taking into account that the Fed is not going to increase the interest rates; the Bank of England had repeatedly admitted its earlier increase possibility. However, the upward trend remains in force within the dollar.
Finance Minister George Osborne said that the UK economy cannot withstand the downward pressure caused by the pace of the global economic development. As a result, the pair GBP/USD has stopped growing and started to decline.
We advise to long with the first target – 1.6400. When the pair consolidates above the first target, we can open deals to the level of 1.6520.
The dollar was stable against the yen on Friday, trading at the three-week low, as the Bank of Japan September meeting reports revealed a split among the members towards the further monetary policy easing effectiveness. Taking into consideration that the American stock market is showing weakness it is difficult to count on the strong dollar/yen growth. There was held the IMF member countries summit. The final press release was issued on Sunday, October 12th.
We advise to short with the first target – 107.20. When the pair consolidates below the first target, we can open deals to the level of 106.40.
Ruban SergeyAnalyst of «FreshForex» company
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