ECB IMPROVES GDP GROWTH FORECAST FOR THE EUROZONE
The main event today was the speech by ECB President Mario Draghi where he noted the intention to keep interest rates unchanged for longer than the asset purchasing program in the Eurozone will last. Earlier in the day, the euro received support from improving GDP growth forecast for the euro area to 2.2% in 2017, a 0.3% increase on what was forecasted in July. GDP growth in the monetary union for the second quarter was 0.6% indicating positive trends and confirming the positive sentiment for traders of the EUR/USD.
Canadian dollar bulls kept pulling the USD/CAD quotes down after the Bank of Canada raised the interest rate yesterday from 0.75% to 1.00%. It was an unexpected move by the central bank and resulted in a sharp fall for the pair. Today optimism was hit by the fall of building permits in Canada by 3.5% in July against a forecasted decline of only 1.5% and the Ivey (manufacturing) PMI in the country reduced to 56.3 in August against the predicted increase to 61.3.
The USD/JPY keeps falling amid weaker positions of the greenback on the background of political tensions within the US, confrontation between the US and North Korea, and the influence of hurricanes on economic activity in America. At the same time, investors are waiting for important macro statistics from Japan on the current account balance, bank lending and GDP growth that will be released today at 23:50 GMT.
After the end of EUR/USD price consolidation around the 1.1925 level, we have seen a strong upward impulse where quotes broke through the important resistance at 1.2000 and approached multi years high near 1.2070. In case of breaking through this mark, the next target will be at 1.2200. After the recent growth, we may see a correction on the background of profit taking, in which case the price may return to 1.2000 and 1.1950.
The USD/CAD quotes resumed moving down after a slight upward correction. The recent interest rate hike by the Bank of Canada gives a solid fundamental background for a further price drop. The immediate goals are located at 1.2100 and 1.2000. Upward correction is likely to be limited by the upper boundary of the descending channel. Volatility is likely to remain high.
The USD/JPY price keeps moving along the upper limit of the local descending channel. Recently the quotes reached an important 108.85 mark and the closest support is limited at 108.50. Overcoming this level may become a reason for the fall acceleration with a potential goal at 107.00. On the other hand, overcoming the local maximum near 109.40 may lead to the trend change with the closest targets at 110.30 and 111.00. The RSI on the 15-minute chart is near the oversold zone, indicating a possible price increase.