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Will ECB Cut Rates? Survey Says No

September 10, 2020 by Mario Soto

Before I get into forex news I will start off with some development from yesterdays story. Yesterday saw electric car and battery manufacturer Tesla run out of power with no charge station in site. After tanking to its biggest one day fall in its history losing almost 34% after being snubbed by the by the S&P 500. A solid blow to the manufacturer but is a rebound on the cards? Let’s take a quick look. The fist question I would ask here is does Tesla actually meet the criteria to be part of this exclusive top 500 club? Well, investors seem to think so. The stock is highly liquid, recording positive earning over the last four quarters and more than enough market cap required to meet its obligations. So fundamentally everything is there for the company to rebound from here. With others in it’s field performing strongly and technically signs point to a positive Christmas for the stock traders may want to take a dabble in it.   Stocks are not what I would usually report on but this one has really peaked my interest this week. For our trader who are interested in dabbling into this possible opportunity, send us a message or email us at cs@asiacapmarkets.com.   All eye are on the European Central Bank today. Are they going to cut rates? The likeliness of this happening is about as likely as North Korea opening its boarders to the free world. But crazier things have happened. not that I can recall any, but I’m sure there’s at least one.   So as the the markets await the dovish ECB, the EUR/USD looks like a sad clown standing in the rain holding a tennis racket for an umbrella. Although a slight recovery took the Euro to the 1.1800 benchmark, the clouds are dark around the pair. Technically this week the pair has confirmed its bearish trend and the bulls a merely a poke in the side with a blunt stick. However remain cautious. We will wait for confirmation at 1.1755 to confirm our views with an initial target set at 1.1718 and 1.1700 to follow. However, a run like this could see the bears skipping hibernation and continuing their run to the 1.1500 mark.   On the other side of the coin we are seeing some uncomfortable noise coming from the bull camp. although I see this as a blip in the matrix, blips can become blobs very quickly. We saw the pair push towards the 1.1800 mark yesterday and nothing has stopped it from continuing its run. Currently trading at 1.1830 at the time of writing this article. A break beyond 1.1855 could see the pair race towards 1.1900 where it would be tough to fight the resistance. Nonetheless, should it push beyond this level, then a break in trend is confirmed and a fresh bullish run is likely.   Just to finish things off, the Aussie and the Kiwi are both performing with absolute confidence today on the back of strong data. In Australia we saw home loans rise by 8.9%.This was an eye watering four times more than analyst expectations. Consumer confidence was also up even though Victoria’s situation has worsened and no clear signs of the lock-down cine to and end are visible. The Business Confidence released by the ANZ shows the business outlook in New Zealand. Increasing numbers indicates increases in business investment that lead to higher levels of output. This month BCI rose to -26 from -41.8 driving the Kiwi up to 0.6693 for the Asian trading day.

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