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EURO to remain Soft

September 4, 2015

Three major events is the cause of uneasiness in the financial sector. Lower oil prices, China related unrest and FED meeting this month to decide about its policy stance. The adverse global development is causing jitters in the financial market.

Fridays, US Non Farm Payroll, which is expected to show gains after strong US weekly jobless claims data, would mean stable unemployment. Positive data would give further hopes for US interest rate hike, though ADP, which represents Automatic Data Processing, pointed weaker economic condition.

Meanwhile, after policy announcement by ECB, which remained unchanged, it was followed by a press conference. During press talk the tone of European Central Bank President was dovish. Mario Draghi showed his keenness to provide stimulus if needed. He confirmed bond buying until next 12-months or beyond if required, but refrained from announcing to add more QE money.

Slow growth syndrome in Euro-region is likely to persist, as latest data suggest weaker growth prospects in coming months.  This also means that inflation is most likely to remain lower than its target.

EURO @ 1.1120 = Euro will remain under pressure and will find sellers on any rise and has top around 1.1250. Only clear break risks for 1.1380, which looks tough, as see risk for a downside for possible test and break of 1.0960 0r 1.0810.

@asadcmka

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