FOREX NEWS: ECB CUTS RATES. FOCUS SHIFTS ON THE US NON FARM PAYROLLS
Forex News: The ECB decided yesterday to cut the interest rate to 0.15% and made a historical move by becoming the first central bank to introduce a negative deposit rate of -0.10%. Following a sharp drop which touched 1.3500 zone, the Euro erased losses and traveled the entire distance back up.
The pairís reaction to the ECB decision is surprising and some analysts speculate that Euro dropped too far, too fast and this fact triggered the consequent move up. However, this is just speculation and the fact remains that ECB introduced a negative deposit rate and dropped the interest rate to 0.15%; these factors are likely to weaken the Euro during the next period and the first lower target is 1.3560 followed by the lowest point reached yesterday: 1.3502.Fundamental Outlook
The dayís main event is the release of the US Non Farm Employment Change which is considered the most important report regarding job creation in the United States. The impact on the market is a huge one almost always, because employment levels are highly correlated with consumer spending which represents a major part of overall economic activity. The release is scheduled at 12:30 pm GMT and a drop is forecast, from the previous 288K to 212K.GBP/USD
Bank of England left the Interest Rate unchanged, as expected and overall we experienced a bullish day although price made an attempt to break 1.6750 to the downside but failed.Technical Outlook
The bulls are starting to shift the balance of power in their favor and 1.6820 seems to be the first upside target. On an hourly chart the Relative Strength Index is approaching overbought territory, a thing which increases the chance of bearish moves but does not nullify the possibility of a break of resistance. Support remains strong at 1.6750.Fundamental Outlook
The United Kingdom has a slow day ahead in terms of economic data but the US employment report will have a hefty impact on the pair and we expect strong movement to be generated by its release.We hope you had a profitable trading week and we wish you a relaxing weekend.