Analysis by GrowthAces.com

(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.

• The EUR/USD opened the Asian session at 1.2450 after selling off following dovish comments from Draghi. The EUR/USD jumped after the release of ZEW index to 1.2540. Our short position at 1.2560 reached the stop-loss level at 1.2540 and we took only a small profit. The EUR/USD is likely to consolidate at least until the Fed minutes on Wednesday. We have placed our sell order again at 1.2580.

Significant technical analysis’ levels:

Resistance: 1.2547 (21-dma), 1.2580 (high Nov 17), 1.2591 (hourly high Oct 31)

Support: 1.2457 (200-hma), 1.2445 (low Nov 17), 1.2398 (low Nov 14)

Analysis by GrowthAces.com