Forexlive Americas forex news wrap: Draghi/ECB extends QE*. EURUSD biggest one day drop since Brexit.

Forex news for North American trading on December 8, 2016

• US major stock indices all close at record levels
• Greek PM Tsipras: Eurogroup decision on short-term debt relief is very important
• AUDUSD, NZDUSD: Bearish weekly signals intact: Targets and stops-NAB
• Forex technical analysis: AUDUSD settles between MA levels.
• Magnitude 8.0 quake in the Solomon Islands now
• Here's why I'm starting to buy EURUSD for the long haul
• Forex technical analysis: EURJPY stalls at 200 hour MA/50% retracement
• USDCAD chops around but low was a key level.
• ECB's Weidmann didn't agree with ECB QE extension
• EIA Natural gas storage change -42 vs -44 estimate
• IMF's Rice : Clearly US economy has been improving. Praises ECB
• GBPUSD falls below 200 hour MA
• Early reactions now see ECB QE through 2018
• Another masterclass smoke and mirrors act by Draghi
• The message today is that the ECB's presence will be in the market for a long time
• EURUSD falls. Yields rise.
• We discussed two options, continue at €80bn or the one we chose says Draghi
• Draghi: ECB can buy assets below the deposit rate
• October 2016 Canadian building permits 8.7% vs -0.7% exp
• US initial jobless claims 258K vs 257K est
• EURUSD moves higher and then lower in volatile trade after ECB hybrid policy change
• We've had the "what" and "when" but now we need the "why" from the ECB
• November 2016 Canadian housing starts 184.0k vs 191.2k exp ann
• Euro blazes higher after ECB move the goal posts
• ECB leaves interest rates on hold - Extends QE but lowers buying rate
• What are your forecasts for EURUSD over the ECB?

In other markets:

• S&P Index:
• Nasdaq composite index;
• Dow industrial average: 13th record close since the US election
• All US indices close at new record levels
• Spot gold $1170, Down -$3.00 or -0.26%
• Crude oil futures $50.83, +$1.06 or 2.13%
• US 10 year note 2.398% +6 BP, 30 year bond 3.097%, +7.5 basis points
• The strongest currency is CAD today. The weakest is the EUR

The EURUSD had its largest one day drop since the Brexit vote back at the end of June. The catalyst was the extension of QE with 80B per month of bond buying until April, followed by 60B for the rest of the year. It was somewhat of a hybrid QE extension (some might call it a pre-announced taper too) in that most were expecting 80B for the duration. The ECB also said that they would buy bonds at yields below the central banks deposit rate of 0.4%. Draghi assured the market it would be involved in the markets "for a long time".

What does the some of the key pairs look like:

EURUSD. The EURUSD has support in the 1.0600-05 area. The first test here found buyers and the price moved up to 1.0630. We are back down looking for another bid. There is some 2.8B options expiring at tomorrow at 10 AM ET. That is a long way away but if traders want to defend the level, there could be some support. Topside resistance at 100 bar MA on 4-hour chart at 1.06409 level. The EURUSD got hammered today. In the new day do we go more? Or correct? Does the option come in play?

USDCAD: The USDCAD bounced off the 100 day MA earlier today at 1.3192. The price rebounded up to 1.3242. The price is back down testing the 1.32000 level. The 100 hour MA at 1.3269 is a key level above. Today, building permits increased by an oversized 8.7% vs 1.6% est. Capacity Utilization rose to 81.9 vs 79.7 last month. NHPI increased by +0.4% vs +0.2% estimate.So overall some bullish data to support a higher CAD. The trade is does the 100 day MA hold support?

AUDUSD: The AUDUSD tumbled back lower with the dollar strength. IN the process the pair fell below the 100 and 200 hour MA, but stalled at the 100 bar MA on the 4-hour chart (at 0.74296). The pair moved higher into the close, and moved above the 100 hour MA at 0.7456. On Wednesday, the GDP in Austalia came out weaker, fell but rallied to new highs into the new day. Today, the price tumbled taking back most of those gains. So we are back in the recent range for this pair with lots of MAs to help define the next bias (bullish or bearish).

NZDUSD: The low in the NZDUSD today stalled just above the 200 bar MA on 4-hour chart at 0.71438. The 100 hour MA is at 0.7138. The low reached 0.7145. On the topside, the 100 day MA is above at 0.7195. In the Asian session and into the London morning session, the price moved above that MA line and extended to a high of 0.72216. The USD buying sent below the MA line and the rotation to the 200 hour MA was on. We now trade between the two MAs. PS the 50% of the move down from the November high comes in at 0.71863. So key resistance at 0.71863-0.7195. Support at the 200 hour MA at 0.71438.

EURJPY: The 200 hour MA on the EURJPY comes in at 121.155 The 50% of the move up from the December low is a 121.00. We are currently trading at 121.00. Sitting on the support. Resistance now at 121.55. A break lower and the pair looks toward 120.45 (61.8% of the move higher).

Below are the % changes of the major currencies vs each other.