Forex Technical & Market Analysis: January 11 2013

MARKET OVERVIEW

2013-01-11 06:25 GMT

Cautious economic optimism induces ECB to hold rates

The ECB Governing Council unanimously decided to maintain the main interest rate at 0.75% at their first monetary policy meeting of 2013. ECB head Mario Draghi revealed a more positive outlook on the European crisis during the press conference following the interest rate announcement. The president suggested that inflation should decline below 2% during 2013. He said that economic weakness in the Eurozone will extend into the new year but that it should give way to a recovery later in the year, as confidence in financial markets is improving gradually and bond yields are seen falling considerably. Credit conditions, already satisfactory, should continue improving as well, as the two long term refinancing operations helped stave off disorderly delevering.

Mario Draghi stressed the importance of a rapid implementation of structural reforms by Eurozone governments in order to increase competitiveness in the area. This should boost growth potential and lead to a rise in employment. The ECB head also pointed out the necessity of establishing an integrated financial framework in the Eurozone of which the “single supervisory mechanism (SSM) is one of the main building blocks.” Jamie Coleman from Forex Live comments on ECB’s lack of action this month: “Draghi did the euro a lot of good in the near-term by taking a rate cut off the table. But in the bigger picture he’s done the ECB a disservice by leading the market to expect a rate cut at the December meeting only to change tack nearly 180 degrees at the following meeting. Central bankers are not supposed to react to each and every blip in sentiment and it appears that Draghi is doing just that.” – FXstreet.com

Forex Economic Calendar

N/A | United Kingdom. 10-y Bond Auction
2013-01-11 09:30 GMT | United KIngdom. Industrial Production (YoY) (Nov)
2013-01-11 13:30 GMT | United States. Trade Balance (Nov)
2013-01-11 15:00 GMT | United Kingdom. NIESR GDP Estimate (3M) (Dec)

Forex News

2013-01-11 05:42 GMT | EUR/GBP stalls the run higher ahead of key 0.8230 level
2013-01-11 05:31 GMT | NZD/JPY bears defend 75.40
2013-01-11 03:59 GMT | EUR/USD wallowing below 1.3300 ahead of the weekend
2013-01-11 02:40 GMT | NZD/USD at session lows below 0.8450

TECHNICAL ANALYSIS

EURUSD

HIGH: 1.32792 | LOW: 1.32504 | BID: 1.32582 | ASK: 1.32588 | CHANGE: -0.06% | TIME: 08:17:23

OUTLOOK SUMMARY: Up
TREND CONDITION: Up trend
TRADERS SENTIMENT: Bearish
IMPLIED VOLATILITY: Low

MARKET ANALYSIS – Intraday Analysis
Upwards scenario: EURUSD gained momentum and formed clear uptrend formation. Currently price is stabilized near its high and resistance at 1.3277 (R1) is the next attractive point. If a break occurs here we expect gradual increase towards to our targets at 1.3288 (R2) and 1.3300 (R3). Downwards scenario: Negative market sentiment would be provided if price decline below the low of the day at 1.3247 (S1). An hourly chart price setup is suggest next retracement formation targets at 1.3236 (S2) and 1.3224 (S3).

Resistance Levels: 1.3277, 1.3288, 1.3300
Support Levels: 1.3247, 1.3236, 1.3224

GBPUSD

HIGH: 1.61773 | LOW: 1.61441 | BID: 1.61486 | ASK: 1.61497 | CHANGE: -0.11% | TIME: 08:17:24

OUTLOOK SUMMARY: Up
TREND CONDITION: Up trend
TRADERS SENTIMENT: Bearish
IMPLIED VOLATILITY: Medium

Upwards scenario: If GBPUSD gains momentum and rose above the resistance at 1.6177 (R1), we expect further uptrend formation with next targets at 1.6191 (R2) and 1.6204 (R3) later on today. Downwards scenario: A short-term negative tendency might face immediate support at 1.6141 (S1). Below here open route towards to expected targets at 1.6127 (S2) and 1.6112 (S3).

Resistance Levels: 1.6177, 1.6191, 1.6204
Support Levels: 1.6141, 1.6127, 1.6112

USDJPY

HIGH: 89.346 | LOW: 88.689 | BID: 89.047 | ASK: 89.053 | CHANGE: 0.32% | TIME: 08:17:24

OUTLOOK SUMMARY: Up
TREND CONDITION: Up trend
TRADERS SENTIMENT: Bearish
IMPLIED VOLATILITY: Medium

Upwards scenario: Medium term bias remains positive after slight correction, provided today. Our next resistance is placed at 89.35 (R1). Rise above it might push price towards to next targets at 89.53 (R2) and 89.70 (R3) intraday. Downwards scenario: Current price deviation might face next support level at 88.77 (S1). We expect price downgrade towards to our targets at 88.59 (S2) and 88.41 (S3) as a part of consolidation formation in case of successful penetration below it.

Resistance Levels: 89.35, 89.53, 89.70
Support Levels: 88.77, 88.59, 88.41

Prepared/Published By FXCC Forex Trading Blog.