Europe Open: Futures and Currencies rally before ECB announcement.

EUR/USD H1

EUR/USD pushing higher before ECB announcement, with H3 and H4 levels potentially acting as intraday support. Bulls will be hoping to push Fiber beyond 1.297 and perhaps 1.30. Failing which, the trading range from 1.288 to 1.295 comes back into focus.

GBP/USD H1

The Asian rally does not inspire confidence in the bulls as price is still below 1.613, which has been acting as a significant support for most of this week. With BOE’s rate decision looming in under 4 hours, we could see whipsaw around H4 before price finally break above or move lower depending on the BOE’s announcement.

DAX Futures H1

Prices gapped up to reach current week’s high created on 2nd Oct. If ECB announcement is favorable, prices could potentially carve up another weekly high. Should positive news from ECB not create a fresh weekly high, bears may sense weakness in bulls to seize initiative to push price lower.

FTSE100 H1

Price gapped up above yesterday’s high, but was unable to sustain above consistently. If bulls are unable to push higher despite having this early advantage, we could see bears gaining control similar to DAX.

Brent Crude Oil H1

Oil seen yet another huge sell off despite a decrease in US inventories by 500K barrels. Analysts were expecting a surplus of 1.5 million barrels but the huge disparity did nothing to keep Crude prices afloat. Prices have now broken below the upward trending line, and also the 23.6% Fib retracement. If price is able to break below 107.70 (previous swing low) we could see oil continue lower seeking 2012 low of $89.

Bottomline:

Despite currencies rallying during Asian hours and the positive gaps that were observed for equities indices, prices have not successfully created a reversal. Price may simply whipsaw or stay at current levels until ECB announcement today which may bring fresh optimism/disappointment into US open.

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