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22 Jan 2015
Sterling paid below $1.50, caught up on Euro sales' crossfire
FXStreet (Bali) - With the Euro being sold aggressively in the last hour of US trading, Cable has also expanded its losses against the US Dollar, breaking through the key psychological 1.50 barrier, setting its lowest at 1.4972.
The collapse in the Sterling follows the ECB's easing package announcement, which was larger than market had been expecting, with the ECB to purchase assets to the tune of EUR60bn/month, starting in March and extending until at least September 2016 vs early expectations of EUR 50bn/month. ECB's balance sheet expansion is expected to be EUR1.14trn. Besides, with Draghi noting that purchases could be open ended until a sustained recovery in price levels, specs found another reason to dump the Euro, with the Pound caught up in the sales crossfire as the USD surges across the board.
Valeria Bednarik, Chief Analyst at FXStreet, notes: "Technically, the 1 hour chart shows indicators losing their bearish slope in oversold levels, not yet suggesting an upward corrective movement. In the 4 hours chart indicators maintain a clear bearish momentum ahead of Asian opening, supporting a continued slide." With 1.50 now out of the way, 1.4880 becomes the next obvious target for the bears, a level last seen in early July 2013.
The collapse in the Sterling follows the ECB's easing package announcement, which was larger than market had been expecting, with the ECB to purchase assets to the tune of EUR60bn/month, starting in March and extending until at least September 2016 vs early expectations of EUR 50bn/month. ECB's balance sheet expansion is expected to be EUR1.14trn. Besides, with Draghi noting that purchases could be open ended until a sustained recovery in price levels, specs found another reason to dump the Euro, with the Pound caught up in the sales crossfire as the USD surges across the board.
Valeria Bednarik, Chief Analyst at FXStreet, notes: "Technically, the 1 hour chart shows indicators losing their bearish slope in oversold levels, not yet suggesting an upward corrective movement. In the 4 hours chart indicators maintain a clear bearish momentum ahead of Asian opening, supporting a continued slide." With 1.50 now out of the way, 1.4880 becomes the next obvious target for the bears, a level last seen in early July 2013.