EUR Tumbles Due to ECB Inaction

Continued inaction on the part of the European Central Bank to lower borrowing costs in Spain and Italy weighed down on the euro throughout the day yesterday. The news, combined with positive US data also helped the dollar reverse its bearish trend during afternoon trading. As we close out the week, a lack of significant news out of the US means that risk sentiment will likely be determined by any announcements out of the euro-zone. If the ECB remains reluctant to announce any new initiatives to combat the euro-zone debt crisis, risk aversion may continue and the euro could slide further.

EUR/USD

A bearish cross on the daily chart's Slow Stochastic indicates that this pair could see downward movement in the near future. Furthermore, the Williams Percent Range on the same chart is in overbought territory. Traders may want to open short positions.

GBP/USD

Most long-term technical indicators show this pair range-trading, meaning that no defined trend can be determined at this time. Traders may want to take a wait and see approach, as a clearer picture is likely to present itself in the near future.

USD/JPY

The Bollinger Bands on the daily chart are narrowing, indicating that this pair could see a price shift in the near future. Furthermore, the Williams Percent Range on the weekly chart has dropped into oversold territory, signaling that the price shift could be upward. Going long may be the smart choice for this pair.

USD/CHF

The daily chart's Slow Stochastic has formed a bullish cross, meaning that an upward correction could form in the near future. In addition, the Williams Percent Range on the same chart is currently close to being in oversold territory. Going long may be the wise choice for this pair.

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