Asia AM Digest: Euro Pressured as ECB Meeting Looms Ahead
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Most major currencies were little-changed amid a lull in top-tier economic news flow. The Euro was alone standout, sinking against all of its major counterparts. The drop may reflect prepositioning ahead of a much-anticipated ECB policy announcement later in the week that is expected to bring clarity on the fate of the central bank’s QE asset purchase program.
A quiet economic data docket in Asia Pacific trading hours offers little besides Japanese manufacturing PMI data. The outcome may not inspire a strong response from the Yen considering its limited implications for the direction of BOJ monetary policy, especially after Prime Minister Abe’s triumph in a snap election held over the weekend.
DailyFX Economic Calendar: Asia Pacific (all times in GMT)
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Retail trader data shows 61.7% of traders are net-long NZD/USD, with the ratio of traders long to short at 1.61 to 1. The number of traders net-long is 10.8% higher than yesterday and 51.6% higher from last week, while the number of traders net-short is 5.7% higher than yesterday and 6.1% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests NZD/USD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger NZD/USD-bearish contrarian trading bias.
Five Things Traders are Reading
- FX Week Ahead: UK & US GDP, BOC & ECB Meetings Ahead by Christopher Vecchio, CFA, Sr. Currency Strategist
- AUD/USD Under Pressure as USD Strength Continues by James Stanley, Currency Strategist
- Weekly Technical Outlook: USD Turn or Burn at Key Resistance by Michael Boutros, Currency Strategist
- Oil Flirts With Resistance as US Output Falls, OPEC Looks at All Options by David Song, Currency Analyst
- A Burden Removed Looks Set To Help Drive USD/JPY Higher by Tyler Yell, CMT
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