Euro Extends Losses Amid ECB Rate Cut Speculation
Benzinga | Nov 01, 2013 08:40AM ET
EUR/USD
The Euro is seeing continued weakness on Friday, on the heels of Thursday's decline of over 150 pips.
A less dovish Fed stance on Wednesday was followed on Thursday by a slew of negative Eurozone data, weighing heavily on the European currency. Thursday's Eurozone data showed inflation slowing unexpectedly and unemployment holding at a record high of 12.2 percent.
Concerns over deflation in the Eurozone have sparked speculation the European Central Bank may cut interest rates as soon as its meeting next week. Strong economic data out of the US could be another catalyst to drive the Euro lower.
Price is testing support around the prior low of 1.3471, with confluence of the nearby 50 period moving average. Momentum indicator RSI has not yet reached into oversold territory on the daily chart.
GBP/USD
The British Pound softened against the US dollar on Friday, despite the UK Manufacturing PMI report showing that export orders grew at their fastest pace in more than two years.
Price is on support of the 50 period moving average with further support beneath at the prior low of 1.5889. A double top pattern has formed on the daily chart.
USD/CHF
The US Dollar continued to surge agaist the Swiss Franc in Friday trading reaching its highest level in two weeks, after the Federal Reserve's policy statement on Wednesday fueled demand for the greenback. A doji candlestick that formed last Thursday marked the beginning of the recent ascent.
Resistance lies overhead at the prior high of 0.9171.
USD/CAD
The Canadian Dollar rallied on Thursday after GDP data beat expectations. The Canadian Dollar fell sharply last week after news that the Bank of Canada held its key interest rate at 1% and cut its outlook for economic growth from now until 2015.
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The pair is indecisive in Friday trading, ranging between support of the 50 day moving average below and a well defined downtrend line above forming resistance.
Friday's ISM Manufacturing PMI surprised to the upside, coming in at 56.4 vs. 55.0 expected, 56.2 prior, causing the US dollar to spike to new highs in the initial reaction.
BY Dan Blystone
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