Euro traders were all eyes on the TLTRO results on Thursday; the big question was to know if banks would accept funds to stimulate the real economy. The results were unfortunately weaker than expected, opening the doors for more talks around the need of a sovereign bong purchase program.

EUR

Euro traders were all eyes on the TLTRO results on Thursday; the big question was to know if banks would accept funds to stimulate the real economy. The results were unfortunately weaker than expected, opening the doors for more talks around the need of a sovereign bong purchase program.

The next crucial economic indicator for the euro is due this week, the flash PMI manufacturing figures after the weakest reading for the year in August at 52.5. Any figure below this one could trigger a new leg down on the EUR/USD due to a weak economic prospective.

From a technical point of view the pair is now hovering near a long term support at 1.2828 and any break below would open the way to the 1.27 territory.

USD

Last week was supposed to be one of the most important of the year for the forex market. It turned out that the first half was pretty boring as traders were mostly in wait and see mode waiting for central bankers, and especially the Fed to make new monetary policy announcements. Traders were expecting the FOMC outcome and hints about the timing around the next rate hike and also a shift in Yellen’s tone from dovish to hawkish. Well whatever the outcome of the FOMC meeting, even if the Fed said that it will take its time before hiking rates, and Yellen is a perma-dovish central banker, market participants decided to enter short on EUR/USD sending it to 1.2838 support from 1.2982 in a couple of hours.

The Dollar Index continued on its bullish rally and approached a two year high at 84.795 this Monday after closing for ten weeks in a row with a positive performance.

GBP

The British Pound was also at the centre of attention last week with the referendum for Scotland independence. All the mediatic noise around the possible outcome of the vote made it really volatile and therefore difficult to trade.

Afterwards, the trade was a clear buy the rumour sell the news setup, indeed at the beginning of the week, the polls were giving the “no” which sent GBP/USD higher, and Thursday overnight, as the probability for the “no” to win was rising, traders started to unwind their positions and take profits sending Cable back to 1.63 area after a brief passage in the 1.65 area.