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EUR/USD crashes through $1.24

The support that EUR/USD had at the $1.24 level looks to have been tested once too many times.

Euro and dollar notes
Source: Bloomberg

EUR/USD sees selling pressure

The European Central Bank will be announcing its latest interest rate decision today. Considering the economic backdrop that Europe has it is highly unlikely that this will change, but what will be of interest is the press conference that will kick off 45 minutes after the announcement.

Pressure continues for ECB president Mario Draghi to implement some form of European quantitative easing. Considering the asset-backed security purchasing scheme has only just started, and the next trench of targeted LTRO’s are due to be issued in less than a week, it is maybe not the time for further action.

The last 48 hours have seen sustained selling pressure on the EUR/USD and yesterday the support that had twice held it above $1.24 finally gave in. The ‘sell the rally’ mindset looks to be firmly in place.

Spot FX EUR/USD chart

GBP/USD neutral despite Osborne’s statement

The Bank of England will also be announcing its official bank rate, at midday today, along with an update on its asset purchasing facility. Neither is expected to change but we will no doubt see a touch more hesitance in the currency markets ahead of the announcement.

Yesterday saw the autumn statement issued by chancellor George Osborne, and although he made several surprising announcements the net effect on the GBP/USD rate was neutral.

As has been the case for the last six weeks, GBP/USD continues to range trade between $1.56 and $1.58. This could well be the case until the 50-day moving average drops down to intersect it.    

Spot FX GBP/USD chart

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