Article by ForexTime

The euro consolidated its gains following weak German data, with the earlier release of industrial production data showing a decline of 1.2% month over month in August, which follows Tuesday’s unexpected 1.8% month over month decline in factory orders. The data corroborates the view that the ECB might be headed for an expansion in its QE program. The EUR/USD tumbled under 1.1250, making a low at 1.1222, from the upper 1.12s. A key support zone in EUR/USD is marked by a confluence of the 50-, 100- and 200-day moving averages between 1.1144 and 1.1192.

Momentum on the currency pair has turned positive as the MACD (moving average convergence divergence) index generated a buy signal.  This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread.  The index moved from negative to positive territory confirming the buy signal.

In addition, the ECB cut the ELA ceiling for Greece to EUR 87.9 billion according to the Bank of Greece, who said the ECB raised no objections to the request for a lowering of the ceiling on potential Emergency Liquidity Assistance available to Greek lenders by EUR 1 billion.

Article by ForexTime

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