The dollar strengthened positions after the BOJ decision

On Friday, the dollar regained ground against the major currencies, ignoring the weak stats of the United States, published in the previous session, while the Bank of Japan surprised the market announcing the introduction of the policy of negative interest rates, while the later investors awaited the publication of US data on changes in GDP in the fourth quarter.

USD/JPY rose by 1.70% to 120.82.

At the end of the meeting to determine the monetary policy, which took place on Friday, the Bank of Japan announced that they decide to reduce the interest rate to -0.1%, and noted that they intend to reduce the rate in the future if necessary.
Meanwhile, investors monitor the release of the revised data on US economic growth in the fourth quarter, expected later today, after the Federal Reserve failed to provide markets enough information about the paces of the rate rises.

EUR/USD fell to 1.0815.

Growth for the euro after the Fed kept its interest rate

The single currency rose against the dollar on Wednesday after a two-day meeting of the US Federal Reserve, who unsurprisingly kept its main interest rate unchanged, but warned that it is closely monitoring global economic and financial events.

The currency pair EUR/USD climbed to 1.0892, an increase of 0.29% for the day. This is the third consecutive day of growth for the euro against the dollar, the euro also rose against the Japanese yen and the British pound respectively to 129.25 and 0.7652.

Fed noted the development of the labor market, but in the published statement, the bankers no longer "believe" in reaching the 2% inflation. It is clear that is not expected to be reached before mid-2018, and currently preferred Fed indicator measuring inflation without prices of food and energy, reported 1.3%.

Daily technical analysis of the EUR/USD for January 26

EUR/USD

EUR/USD had a moderate bullish momentum yesterday, forming a peak of 1.0856. Expectations are now up to test 1.0969. Initial support is at 1.0800, whose breach could lead price to neutral trading zone testing 1.0700. Overall bearish scenario is still in force, but the price is moving sideways in consolidation so that the limits of the range should also be monitored. Only a clear break from the range will give a clear direction.

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Technical and fundamental analysis of the EUR/USD for January 25

EUR/USD

As seen on daily chart, this currency pair is in a sideways movement.

Since the ECB press conference it became clear that we can expect additional stimulus for the European economy in March. This fundamental reason would lead to lower values ​​of the currency pair.

We need to follow the information coming from the Fed and the stock market in the US. If the market continues its downturn, the planned increase in the base rate may be delayed. In recent days, there is a rise in the major indices in the US, but so far it is too early to say whether we have current lows.

EUR/USD is still in a sideways movement, trade within the Bollinger bands. The price is close to the lower limit of lateral movement support 1.0800. Another support level is 1.0710. If the price overcome 1.0800, we can expect a test of 1.0710.
Resistance levels are about round numbers 1.0900, 1.1000, 1.1100 and 1.1050.

After the meeting of the ECB: What to expect from EUR/USD

Governor of the European Central Bank Mario Draghi made a signal on Thursday press conference that we can expect expansion of the stimulus in March.

Financier emphasized inflation risks, while his remarks continue to weigh over the united currency in the coming days, note forex strategists of BTMU. According to them, however, the EUR/USD pair will likely remain locked in a trading range in the short term as the euro can be supported by the growing anti-risk sentiment.

Separately, analysts believe that the Fed will focus on the more "peaceful" tone after its meeting next week, which will put moderate pressure on the dollar. From BTMU emphasize, however, that at some stage the US regulators don't have special reasons for concern, and so do not expect sharp movements in EUR/USD.

Their colleagues from BNP Paribas are bearish and recommended selling the euro against the dollar, advising investors to consider opening short positions at current levels to 1.0400. Protective stop to limit losses is set at 1.1005.

Even before the meeting of ECB policymakers of the investment fund BlueBay Asset Management predicted development of the events and announced that they open short positions on EUR/USD with the target of 1.0500.

Technical analysis of the USD/JPY for January 21

Dollar/yen made an attempt to low yesterday, bottomed at 115.97 but closed the day higher at 116.95 and hit 117.47 earlier this morning. As seen on the chart below we have a four-hammer formation after rejection of important move below 116.00 support, which implies a potential upside pressure. The bias is bullish in nearest term testing of 118.00 - 118.50. However, the bearish scenario remains valid at this stage and only a clear break above 118.50 should it break. Support for the day is seen on 116.50. A clear break below it could take price to neutral zone for re-testing 116.00 key support, which needs to be clearly pierced down to continue the bearish scenario.

Technical analysis of the EUR/USD for January 21

Euro/dollar attempted to push higher yesterday, slipped above 1.0969 again, but again failed to move convincingly above this zone, then tumbled down and closed at 1.0891. Commercial bias remains neutral in nearest term. Intraday support is seen at 1.0850, whose breach could lead to downward pressure on testing 1.0800. On the upside, the important resistance is 1.0969. A clear break and daily close above that level could trigger further bullish pressure testing 1.1060 and the resistance trend line. The fundamental focus today will be on the ECB press conference. The price is still moving sideways without clear direction from almost 7 weeks. Today and tomorrow there will be news/data with a strong impact, which is expected to be a catalyst for the market and to give a clear direction and better opportunities for trade. Technically, as long as the pair remain below trend line resistance, the bearish scenario should remains strong.

The euro rose against the dollar after the IMF lowered its forecast for global economy

On Tuesday, the International Monetary Fund cut its global growth forecasts for 2016 by 20 basis points to 3.4%, marking the third decrease in the last year. The message was announced hours after the National Bureau of Statistics of China said that the country's economy grew by 6.8 percent in the fourth quarter, growing slower than the previous quarter. The annual GDP for 2015 increased by 6.9%, significantly lower compared with growth of 7.3% a year earlier.

The pair fluctuated between 1.0859 and 1.0938 before closing the day at 1.0907.

Morgan Stanley advised buying of EUR/USD

Forex strategists from Morgan Stanley advise their clients to buy euro against dollar.

"The expectations, that the Bank of Japan may take additional stimulus reduced and the yen rose strongly. Therefore, investors will need another currency, demand of which depends on the growth of anti-risk sentiment. "- Note analysts. -" We believe in this role will enter the euro, which has a chance to rise in the event of a continuing decline of the US stock indices".
By Morgan Stanley added, that after the increase in rates in the US in December, Fed is in a vulnerable position: at the moment the price is fully accounted for only one further raising of the interest rates this year, although recently were mentioned three or four.
Regulators take a wait and corporate earnings in the US fail to stabilize stock markets. All the attention of investors will focus on global macro-economic data is likely to remain weak.

By Morgan Stanley advised buying of EUR/USD at current levels to $ 1.13 and a stop to limit losses below $ 1.0850.