EUR/USD: Consolidation Mode On

 | Nov 18, 2014 06:33AM ET

GROWTHACES.COM Trading Positions
USD/JPY: long at 115.00, target 117.70, stop-loss 115.90
USD/CHF: long at 0.9560, target 0.9760, stop-loss 0.9570
EUR/CHF: long at 1.2025, target 1.2095, stop-loss 1.1995
EUR/GBP: short at 0.7990, target 0.7840, stop-loss 0.8060
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EUR/USD: Consolidation Mode On
(small profit taken after EUR/USD reached the stop-loss at 1.2540, sell at 1.2580)

  • Monday brought some comments from the ECB and Fed central bankers. The attention was focused mainly on the ECB’s Draghi speech. ECB President Mario Draghi said that the ECB is ready to do more if it turn out that its current efforts are not sufficient to accelerate the euro zone recovery. Draghi said euro zone growth momentum had weakened over the summer, but the ECB's policy steps and euro zone countries' reforms should still lead to a moderate recovery next year and in 2016. He reiterated the ECB was ready for additional measures if inflation remained too low for too long, saying ECB staff was preparing the ground for further steps should they become necessary, and such new measures could include purchases of sovereign bonds.
  • Peter Praet, one of the ECB's six Executive Board members, said that, while the ECB would normally disregard oil price moves, fragile inflation expectations changed the situation. He said the ECB is ready to take further aggressive measures if the slump in oil pushes the Euro zone towards deflation.
  • On the other hand, ECB Executive Board member Yves Mersch warned: “Easing of monetary policy cannot work effectively when the European economy is structurally not in good shape.” He urged political leaders instead to reform their economies to boost growth.
  • Fed Governor Jerome Powell said the U.S. central bank would need to see progress toward its 2% inflation goal before tightening policy. Powell added he is cautiously optimistic on the U.S. economy's prospects because of good recent job growth. In his opinion the Federal Reserve is likely to hike interest rates in mid-2015 if the U.S. economy continues to grow, but monetary accommodation is needed for now because inflation is likely to remain low for some time.
  • The German ZEW index (analyst and investor sentiment ) for November has come in at a much stronger than expected 11.5. The median forecast was at 0.5 compared to -3.6 in the previous month. It was the first increase in sentiment since December last year.