FX News – January 10 2014: ECB Prepared to Make “Further Decisive Action” If Necessary

FX Strategy Articles > FX Trading Tips

The European Central Bank (ECB) and the Bank of England (BoE) both maintained their current rates, at 0.25 per cent and 0.5 per cent, respectively. The move was within analysts' expectations.

Much of the focus, however, fell on the ECB announcement as the bank's President, Mario Draghi stated that they are prepared to make "further decisive action" if necessary.

The EUR/USD experienced a sharp decline yesterday from a peak of 1.3627 to a low of 1.3560. The pair managed to rise back up later in yesterday's session, and has hovered around the 1.3610 area.

In today's session, news that could affect the pair are the Eurozone's GDP data (10:00 AM, GMT), and the US Nonfarm Payrolls (1:30 PM, GMT). Expect volatility in the pair during those announcements.

The EUR/USD pair is currently trading at 1.3611, with initial resistance seen at 1.3662, followed by 1.3696. Meanwhile, initial support is at 1.3576, followed by 1.3542.

China released earlier its trade data earlier today, wherein it was revealed that its trade balance narrowed significantly in December. From 33.801 billion in the previous period, it was only at 25.600 billion in December, which was lower than the projected 31.150 billion.

Chinese exports only increased by 4.3 per cent in the past 12 months in December, which was significantly lower than the previous 12.7 per cent growth. The number was then balanced by the higher-than-expected imports for the same period. It was up by 8.3 per cent, compared to the previous increase by 5.3 per cent. Analysts only expected a more modest 5.3 per cent growth in December.

In Australia, the Housing Industry Association of the country said that new home sales in November was up by 7.5 per cent compared to the previous month. Prior to that, new home sales shrank by 3.8 per cent.

The news from China and Australia helped give the AUD/USD pair a slight boost in today's session. After initially dropping at the 0.8880 area at the opening of the Asian session, it spiked back up above the 0.8900 area. It is currently trading at 0.8900, with initial resistance seen at 0.8908, followed by 0.8930. Meanwhile, initial support is at 0.8854, followed by 0.8832.

By FX Strategy Team, Published on 10th of January 2014
eTorro - Trading Starts Here

Start Trading Forex with up to $10,000

  • 100s Videos and FX Strategy articles
  • Advice from our FX traders
  • Practive free with using real time