EUROPEAN session review: ECB cut its rate

Data released: 

06:45 GMT Switzerland SECO Consumer Climate (3m) (Q3) -5 -4 -9 

08:00 GMT Switzerland Foreign Currency Reserves (Oct) 434.7B _ 432.4B 

11:00 GMT DE Industrial Production s.a. (MoM) (Sep) -0.9% -0.2% 1.6% Revised from 1.4% 

11:00 GMT DE Industrial Production n.s.a. w.d.a. (YoY) (Sep) 1.0% 0.9% Revised from 0.3% 

12:00 GMT UK BoE Interest Rate Decision 0.5% 0.5% 0.5% 

12:00 GMT UK BoE Asset Purchase Facility £375B £375B £375B 

12:45 GMT EMU ECB Interest Rate Decision (Nov 7) 0.25% 0.5% 0.5% 

ECB surprised the markets by cutting its rates. Earlier weaker then expected Germany Industrial Production data were ignored. However now it will be added to pig-box of negative data. 

Investors are waiting for ECB’s governor Mario Draghi speech. This morning almost everybody beleived in dovish tone of the press-conference. But after latest news intrigue was increased. 

EURO 

EUR/USD fell sharply after ECB rates cut. This decision was surprised for investors especially after ECB source told the rate cut was unlikely. EUR/USD fell to 1.3353 from 1.3505 less then for 10 minutes. Now market is waiting for ECB governor Draghi press-conference. ECB cut its rate 25 bp to 0.25%. This decision was surprised for investors especially after ECB source told reporters the rate cut was unlikely. 

EUR/USD stays under pressure. Initial support area is at 1.3320/50. Next support is at 1.3250 and it seems downward pressure will persist. Resistance stays at 1.3480. 

POUND 

BoE left its rate unchanged at 0.5% and Asset Purchase Facility at £375B 

GBP/USD said nothing after BoE rate decision was announced.Initial support is at 1.6060. Crucial - at 1.6020. Major resistance stays at 1.6130. 

YEN 

The yen weakened a bit versus the dollar. 

USD/JPY stays stable near Y98.70 earlier. Strong resistance comes at the upper bound of the daily charts triangle from May 22 at Y98.80/85. Above resistance is around Y99.60 (Sep 20 higihs) and Y100.60 (Sep 11 highs).Support is around Y97.80 with a stronger one - on the lower bound of the triangle at Y97.30. Break under widens losses to Y96.55 (Oct 7 lows) and Y95.80 (Aug 8 lows). 

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