Consolidation ahead of NFP

EUR/USD

Range: 1.2373-1.2378
Support: 1.2288
Resistance: 1.2525

So Mr Draghi delivers with the ECB lowering its official rate by 25 basis points taking the ‘refi’ rate to 0.75% and the deposit rate from 0.25% to 0.00%! The ECB president sounded very much like the British summer with the main headline being ‘downside risk to growth’ all in all his tone to me was the ECB admitting the problem is here instead of a potential problem. Euro traded through the 1.2410 level with ease and has failed to rally above since as we await the US jobs report today with consensus being 100k with the unemployment rate remaining steady at 8.2% I expect focus on the June low of 1.2290.

GBP/USD

Range: 1.5515 – 1.5537
Support: 1.5475
Resistance: 1.5600

The BoE announced a £50 billion expansion in its asset purchase programme, taking the stock asset purchases to £375 billion which is estimated to be about 25% of annual GDP. The MPC cited weak growth, both domestically and abroad and tight credit conditions from the Euro area. The announcement was exactly what the market had predicted. Today will be all about NFP with a small distraction in the way of UK input/output prices at 9.30am this morning.

AUD/USD

Range: 1.0242-1.0292
Support: 1.0150
Resistance: 1.0350

The PBOC joined the stimulus party yesterday cutting 1-year lending rates by 31 basis-points to 6%, 1 year deposit rates by 25 basis points to 3% and slashing bank lending rates by 30%. The market is now predicting that next week’s Chinese growth data will be below expectations. The AUD performed remarkably well yesterday with investors piling into the lifestyle currency looking for yields with EUR/AUD breaking all time lows. Again all about NFP’s today but I’m still not ready to try and pick a top in the AUD yet despite overnight signs of fatigue.