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Alert - 09:20 (CET) - EurUsd profit taking ahead of ECB's rate decision
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The day has finally arrived. Today, at 13:45 (CET), the European Central Bank (ECB) will announce its interest rate decision, and the traders are waiting for a 50bp rate cut to stimulate the access to credit and avoid a deeper deflactionary process in the Eurozone. Even though the rate cut has already been priced in, the traders' attention will be focused on Trichet's speech, once the decision has been announced.
If the President of the ECB talks about a deeper recession outlook, the traders will speculate about more rate cuts in the first months of 2009.
The EurUsd trading at 1.2614, ranging between 1.2608 and 1.2728, under yesterday's close at 1.2717. Checking the hourly graphics, the 20- and 50-day Exponential Mobile Averages (EMA) are under the 200-day EMA.
The traders are watching the supports at 1.2500, 1.2324 (January 2006 high) and 1.2000 (key). The resistances are set at 1.2733 (October 23rd high), 1.3000 (key) and 1.3353 (October 21st high).
Meanwhile, the 60-minute Relative Strenght Index (RSI) is at
36 points, near the oversold area. The average volatility per hour is 150 pips. Checking the daily graphics, we see that the current price is under the 38.20% (1.3063) and over the 50.00% (1.2141) Fibonacci retracement lines.
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