EUR/USD Jumps Higher After ECB Policy Decision

Both the EUR/USD and GBP/USD registered an initial positive reaction to their respective monetary policy decisions.  The ECB and BoE kept their interest rates at their present levels, yet the BoE only increased its QE packaged by 25 billion Pounds vs 50 expected.  Meanwhile, the ECB isn’t budging on their language that their will practice a gradual removal of alternative liquidity measures from the monetary system.  Therefore, it seems the ECB will make us wait until next month to get a better idea of if/when/how the central bank will reign in liquidity.  The ECB is likely waiting to see how the Euro interacts with the Dollar and Yuan over for a little longer before moving forward.  This neutral language isn’t quite what the bulls were hoping for, yet the EUR/USD is trading in a relatively strong technical position despite today’s inaction.

Speaking of technicals, the EUR/USD still faces technical barriers in the form of our 2^nd and 3^rd tier downtrend lines along with October highs and the highly psychological 1.50 level.  Therefore, a few tough topside challenges are separating the EUR/USD from more accelerated upward movements.  As for the downside, the currency pair has multiple uptrend lines serving as technical cushions along with 11/4 and 10/27 lows.  Meanwhile, tomorrow’s U.S. unemployment data has taken on a larger role since the ECB decided to sit tight for the month of November.  Furthermore, the EU won’t be releasing any noteworthy data for the remainder of the week, meaning all eyes will be on the U.S.

The U.S. will release its headline Unemployment Rate along with Services Employment Change data.  The U.S. Unemployment Rate is expected to print at 9.9%, just a hair below the 10%.  ‘If the number prints at 10% or above, this could have a negative psychological impact on investors and rattle U.S. equities, thereby appreciating the Dollar.  On the other hand, any stronger than expected unemployment data could boost U.S. equities and lead investors towards higher risk vehicles such as the EUR/USD.  Therefore, investors should keep a close watch on tomorrow’s unemployment data while monitoring the Dollar’s  broad-based reaction.

Present Price: 1.4909

Resistances: 1.4909, 1.4926, 1.4947, 1.4966, 1.4983, 1.4994, 1.5022

Supports: 1.4872, 1.4856, 1.4840, 1.4822, 1.4804, 1.4781, 1.4769

Psychological: 1.50, 1.45

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