The Euro continued to decline against the dollar on Monday after investors shrugged off Friday’s soft U.S. jobs report and focused on the fallout from a recent European Central Bank move to loosen policy. The Euro gave back Friday’s gains and softened in wake of a recent European Central Bank decision to trim its benchmark interest rate to a record-low 0.05% from 0.15%.
The Euro gave back Friday’s gains and softened in wake of a recent European Central Bank decision to trim its benchmark interest rate to a record-low 0.05% from 0.15%. The central bank also lowered its deposit facility rate to -0.20% from -0.10% previously and its marginal lending rate to 0.30% from 0.40%. The European monetary authority will also begin an asset-backed securities purchasing program to shore up the recovery. The ECB cut its forecast for growth this year to 0.9% down from 1.0% previously and cut the forecast for 2015 to 1.6% from 1.7%. The bank also lowered its inflation forecast for this year to 0.6% from 0.7% in June.
Sentiments that European monetary policy will loosen while the U.S. and the U.K. move in different directions softened demand for the single currency.
Intraday bias remains on the downside as 21 and 55 EMA trend indicators are crossed downward in the 1 hour, 4 hours, Daily and Weekly charts signalling the continuation of the bearish trend established since 3 months now. SSRC, Stochastic, RSI and MACD Oscillator indicators are showing bearish momentum is still intact, so am expecting further decline to 1.28595 supports (Weekly S1) in the short term picture after price successfully broke 1.29207 supports (Fridays low).