Mtechtips MCX-SX EURINR INTRADAY trading analysis 06-10-2016

Mtechtips MCX-SX EURINR INTRADAY trading analysis 06-10-2016

MTECHTIPS Euro snapped two-day losses during mid-European trades Wednesday after report emerged that the European Central Bank (ECB) may start tapering its quantitative easing programme before the end date on March 2017.A report said that ECB would probably wind down its 80 billion euro ($90 billion) monthly bond purchases gradually before ending its quantitative easing programme citing unidentified officials at euro zone countries’ central banks.Such tapering could undermine investors’ appetite for higher-returns in emerging Asia, which has been supporting regional currencies and bonds.However, a spokesperson for the ECB said that the Governing Council “has not discussed these topics”, which President Mario Draghi has previously iterated.Philippe Gudin, chief European economist at Barclays, and a team of researchers said that they expected an extension of QE with a reduction in the pace of monthly purchases.”We believe that in 2017, the ECB will choose to purchase less than 80 billion euros per month, but it will need to manage communication carefully to explain that reducing the amount of monthly purchases while maintaining it for an undefined but long period is not tapering,” the research note said.Further clarity on these speculations will be cleared in next ECB Governing Council meeting on October 20.”The market will be seeking clarity on this issue from the ECB speeches lined up this week – Nowotny today, Angeloni and Coeure on 6 Oct, and Mario Draghi on 7-8 Oct. The next ECB meeting is due on 20 OctEURINR failed to break its support 74.50, as after witnessing a gap up opening at 75.0025 pair trade above 74.90 levels. On the EOD chart EURINR found support of 23.8% Fib Retracement of its previous fall while a doji candle stick formation is indicating for neutralization of bearishness in short term and pair may test 75.25-75.50 again.However, strong resistance is seen at 75.60 and pair would need to trade above it in order to test 75.85-76.10.

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