The euro approached a two-year low versus the dollar

Good morning from Hamburg and welcome to our first Daily FX Report for this week. Emergency workers filled thousands of sandbags on Sunday as the area around Buffalo, New York braced for potential flooding as warming temperatures began to melt up to seven feet (2 meters) of snow. Hundreds of members of the New York National Guard were in Erie County and Buffalo to help with flood prevention after days of work to clear roads and dig homes and cars out of the record snow from a storm that killed 13 people. The National Weather Service said roads could flood quickly from snow melt, since the storm blocked drains, and issued warnings for potential flooding of four rivers and creeks.

Anyway, we wish you a successful trading week!

Market Review – Fundamental Perspective

One week after the European Central Bank president vowed to revive inflation “as fast as possible”, policy makers will receive a glimpse on just how feeble cost pressures are now in the euro region. Economists forecast data on November 28 will show consumer-price growth matching the weakest since 2009. That would add to the drumroll for a stimulus debate at the December 4 meeting as panels of officials study possible new measures to prepare to cut their economic outlook. While Draghi has stoked pressure toward sovereign-bond buying, colleagues from Germany to the Netherlands are unconvinced quantitative easing is warranted, and his vice president suggested at the weekend that the ECB might hold off until next year. Inflation data for November are forecast to show a dip to 0.3 percent from 0.4 percent, while economic confidence is seen declining and October unemployment staying at 11.5 percent, according to economists surveyed by Bloomberg before those reports this week. The inflation rate has held below half the ECB ́s target of just below 2 percent for the past year, spurring interest-rate cuts as well as programs of long-term bank loans and covered-bond buying, with purchases of asset- backed securities starting last week. The euro approached a two-year low versus the dollar before German data forecast to show business confidence declined for a seventh month. The shared currency fell against major peers on November 21 after European Central Bank President Mario Draghi said officials “ will do what we must” to raise inflation. It fell 0.2 percent to $1.2373. It touched $1.2358 on November 7, the lowest since August 2012. The single currency slipped 0.2 percent to 145.68 yen.

Daily Technical Analysis

GBP/USD (4 Hours)

As the chart shows, the GBP decreased steadily versus the USD since the mid of October. The support line at 1.5596 was strong enough as the price was unable to break through and rebounded. The price touched twice the 1.5727 and rebounded towards 1.5596. On a short term the CCI is indicating a possible upward movement, but further losses may occur.

Support & Resistance (4 Hours)