S&P and Dow Wipe Out 2018 Gains, ECB in the Spotlight

Equity Markets Slump Again, BoC Delivers a ‘Hawkish Hike’

The dollar traded higher against most of the other G10 currencies on Wednesday. It lost ground only against JPY and CAD, while it traded virtually unchanged versus CHF. The greenback gained the most against SEK, GBP and NOK in that order.

DJIA — Technical Outlook

Yesterday, the equity markets got hit heavily again and the Dow Jones Industrial Average, together with the S&P 500, closed below their yearly opening prices. At first, it looked like the DJIA was finding it hard to move away from the 25000 level, but as the US session was getting closer to the closing bell, the indices started selling off. Certainly, we could see a bit of correction happening back to the upside, but as long as the price remains below the short-term downside resistance line drawn from the high of the 10thof October, we will remain bearish for now.

ECB and Norges Bank Take the Central Bank Torch

The euro traded lower against the majority of the other G10 currencies following the more-than-anticipated slide in Eurozone’s preliminary PMIs for October (see below). It outperformed only SEK, GBP and NOK, while it traded virtually unchanged against NZD. It lost the most ground against JPY, CAD and USD.

EUR/USD — Technical Outlook

The common currency continues to weaken against the US dollar and yesterday was a good example to that, as we saw EUR/USD tumbling almost 100 pips. The pair broke through its key support at 1.1430, which kept holding the rate from dropping lower throughout this month. Even if EUR/USD gets back above 1.1430, we will still remain bearish, as the pair is still below its short-term downside resistance line drawn from the peak of the 26th of September. EUR/USD continues to build lower lows and lower highs; thus, we will continue aiming to the downside.

As for the Rest of Today’s Events

During the European morning, we have the German Ifo survey for October. Both the current assessment and expectations indices are anticipated to have declined to 106.0 and 100.3 from 106.4 and 101.0 respectively, something that could bring the business climate index down to 103.2 from 13.7.

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