Potential Surge for Euro and Ebay Stock this Wednesday
More Declines for EURUSD? | Potential Short-Term Pullback
EURUSD could be in for a sharper selloff, as it ended 2014 on a very weak note. Greek political troubles weighed on the shared currency, with the snap election later this month set to determine whether or not the country could secure more bailout funds from the Troika.
A victory by the opposing Syriza party could mean more euro weakness
since this could prevent the country from getting another set of aid. On the other hand, if the current coalition government is able to hold on to power, the euro could be in for a quick relief rally.
Bear in mind that the path of least resistance for this pair is to the downside, as the US economy has shown a strong Q3 2014 GDP reading. The final figure was upgraded from 3.9% to 5.0% towards the end of December, reviving talks of a rate hike or monetary policy tightening from the Fed this year.
With that, EURUSD made a fresh break below the 1.2000 major psychological level and may be due for a move down to the 1.9700 area this week. There are no event risks for today but the FOMC is set to release the minutes of its latest policy meeting towards the latter half of the week.
GBPJPY Double Top | Potential 1000-Pip Selloff
GBPJPY created a reversal pattern on its 4-hour time frame, indicating that the recent uptrend is about to turn. Price made a double top, with resistance around 190.00 and support near 180.00, which makes for a 1000-pip chart formation.
A drop below the neckline of the pattern around 180.00 could mean more losses for GBPJPY, possibly until the support zone at 170.00. Bear in mind though that a near-term support zone is also located around 174.00-175.00, which might keep any losses in check.
Last month, Japan released a fresh round of bleak inflation and spending figures. The Tokyo core CPI and national core CPI both reflected a downturn in price pressures, due mostly to the drop in oil prices. This could make it more difficult for the BOJ to combat deflation, which might warrant more monetary easing.
In that case, GBPJPY could see a quick bounce back to the middle of the pattern around 185.00 or higher. Lack of action from the central bank appears to be supporting the Japanese currency for now, along with the downturn in risk appetite due to global growth concerns.
EBAY Shares Testing Resistance | Ready to Drop to $53/Share?
After its strong rallies towards the end of 2014, EBAY shares seem to have lost momentum around the current price. Resistance at the $57/share area appears to be holding, as this lines up with the previous highs.
With that, EBAY shares could retest support around the $53/share area near the moving averages. For now, the 50 SMA is moving above the 200 SMA, indicating that the uptrend could carry on. However, criss-crossing movements of these indicators suggest that the range-bound movement is likely to persist.
A break past the previous highs, however, would confirm that EBAY shares are poised for more gains. This could hinge on the FOMC minutes up for release this week, as indications of Fed tightening could weigh on US equities. Although the US economy printed stellar GDP data for the third quarter, the prospect of a rate hike could mean lower business investment later on.
An extended selloff and a break below the SMA support zone could seal in a longer-term selloff for EBAY shares. This could lead to a move back down to the $50/share area, which is in line with the bottom of the stock range.