The Euro was the biggest loser on Thursday, after ECB policy meeting. ECB President Mario Draghi said that underlying inflation is still weak and some improvement could be expected into 2017/18, while the economy is showing signs of stabilizing. The key point, bond purchasing program that investors were focusing on, was not on the table, but Draghi said that there are no decisions of expanding the program, which is likely to end by March 2017 and any adjustments of the program could be expected in December.
These comments initially supported the single currency that at one moment spiked to 1.1039, but lacked momentum to hold gains above 1.1000 handle and quickly returned to pre-ECB levels.
Strong downtrend in past one month extended after investors realized that Draghi’s comments did not pose threats to their short positions, the Euro accelerated further down. Fresh bearish acceleration probed below next targets at 1.0900 zone and posted new low of over four months at 1.0894, with strong bearish sentiment in play that could drive the single currency towards lows at 1.0800 zone, posted in March.
The US dollar firmed on Thursday against the basket of major currencies, driven by upbeat US Existing home sales data which rose to 3.2% in September, compared to forecasted advance of 0.4%. in addition, sharp fall of Euro after ECB, gave additional boost to the greenback.
The dollar index spiked on Friday to fresh multi-month high at 98.54, levels last traded in March, on extension of Thursday’s strong rally.
British pound was dragged lower by weaker Euro and UK retail sales that undershot forecasts. The pound dipped to strong technical support at 1.2208 against the dollar on Thursday and entered consolidation phase above fresh low.
The dollar eased against Japanese yen, correcting the latest leg higher that peaked at 104.18 in early Friday. The pair regained traction after false break below strong 103.50 support, for renewed attempts above 104.00 zone, which so far proved as strong barrier.
Australian dollar is correcting Thursday’s sharp fall from new high at 0.7732 that bottomed at 0.7616 and market the biggest one-day fall since mid-September. Aussie received support from better-than-expected data from China overnight, but fresh strength of the US dollar weighs on Australian currency which rallied from 0.7504 to 0.7732 on uninterrupted six-day ascend.
Gold price slipped further on Friday, after posting fresh high at $v 1274 on Thursday, but was unable to sustain gains. The yellow metal is around $11 lower on Friday, and posted session low at $ 1261, pressured by stronger dollar.
Asian stocks were mostly lower on Friday as the dollar climbed to seven-month highs against a basket of currencies and dragged down crude oil prices, cooling investor risk appetite.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.4%; Japan’s Nikkei 225 was down 0.3% and Australian stocks down 0.2%. Singapore fell 0.7% and Shanghai erased earlier gains and dropped 0.2% as Chinese Yuan depreciated.
European stocks opened slightly lower on Friday, but so far maintain overall bullish tone of past couple of days.
British FTSE 100 index is up 0.47% from opening and attempts at Thursday’s high at 7019; German DAX is up 0.42% but still below Thursday’s high at 10743, while French CAC 40 Index also gained 0.42% from opening and ticked above Thursday’s high at 4552.

Highlights of the day

Europe
EU Economic summit is in focus on Friday. The EU ministers will have quite busy timetable and will be talking about Russia, migration and trade issues. British PM Theresa May attends the summit of EU leaders for the first time and will be briefly talking about Brexit at dinner. May is expected to formally notify the EU of Britain’s plan to leave the bloc by the end of March, but May and her ministers have sent conflicting signals about what kind of relationship they envision once the divorce process ends.

America
Inflation and Retail Sales data from Canada are the highlight of American session. Inflation is expected to tick higher in September, according to 0.2% forecast, against -0.2% in Aug, while core CPI is seen at 0.2% in Sep, up from 0.0% in Aug.
Retail sales are expected to rise in Aug, on 0.3% forecast vs -0.1% in July and core retail sales are forecasted at 0.3% from -0.1% in July.
Release time 12:30 GMT.

Important levels
EURUSD
The Euro fell sharply after ECB and fresh weakness is establishing below 1.0900 level. Sharp bearish acceleration extends downtrend from 1.1260 zone, now eyes nest support levels at 1.0820/1.0800. The Euro is on track for another strong weekly bearish close that confirms strong bearish stance. Initial resistance lies at 1.0928, followed by 1.0950 and 1.1000.
USDJPY
The pair bounced above 104.00 barrier after false break below strong 103.50 support. Fresh dollar bulls shift n/t focus higher again, with lift above plethora of resistances above 104.00 handle, required to signal bullish continuation. Session high at 104.18 marks initial barrier, ahead of 104.35/43 and 104.62 pivot. Immediate support lies at 103.70, followed by key 103.50 level and 103.32/15.
GOLD
Gold eases further from fresh high at $1274, pressed by stronger dollar. The price is back below 200SMA which again acts as resistance, currently at 1267. Weekly close below 200SMA will generate fresh bearish signal. Immediate support lies at $1260, ahead of $1256 pivot, loss of which would confirm lower top at $1274., Market Analysis