We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bearish
Wall Street
Bearish
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • 🇫🇷 Industrial Production MoM (MAY) Actual: 19.6 Expected: 15.1% Previous: -20.1% https://www.dailyfx.com/economic-calendar#2020-07-10
  • Heads Up:🇫🇷 Industrial Production MoM (MAY) due at 06:45 GMT (15min) Expected: 15.1% Previous: -20.1% https://www.dailyfx.com/economic-calendar#2020-07-10
  • A macro forex trading guide exploring how to trade the Euro vs the Swedish Krona and Norwegian Krone through the prism of the Core-Perimeter model. Get your market update from @ZabelinDimitri here:https://t.co/n6zwlZJmGO https://t.co/jbUscJ9E0u
  • USD/CAD IG Client Sentiment: Our data shows traders are now net-short USD/CAD for the first time since Jun 26, 2020 when USD/CAD traded near 1.37. A contrarian view of crowd sentiment points to USD/CAD strength. https://www.dailyfx.com/sentiment https://t.co/SJ4cDT3iIe
  • Learn about the ASEAN-China relationship and how to trade ASEAN currencies like the Singapore Dollar, Indonesian Rupiah, Philippine Peso and Malaysian Ringgit using the Core-Perimeter model. Get your market update from @ZabelinDimitri and @ddubrovskyFX : https://t.co/rNJkPpVCdk https://t.co/6qJKFUBFRm
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.99%, while traders in US 500 are at opposite extremes with 72.57%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/cZNGi5LUei
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.15% 🇨🇦CAD: -0.08% 🇪🇺EUR: -0.12% 🇨🇭CHF: -0.20% 🇳🇿NZD: -0.21% 🇦🇺AUD: -0.30% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/hGwx59H99O
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.30% France 40: 0.21% FTSE 100: 0.15% US 500: -0.28% Wall Street: -0.29% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/H0zNNKbJbt
  • The Core-Perimeter trading model helps traders understand interactions between global economies, helping to trade the assets embedded in these relationships. Get your market update from @ZabelinDimitri here:https://t.co/dKRAo00lfA https://t.co/619vy6dGeq
  • The US Dollar is pressured as rising coronavirus cases fail to dent 2021 GDP bets. Could the Singapore Dollar, Indonesian Rupiah, Philippine Peso and Malaysian Ringgit rise? Find out from @ddubrovskyFX here:https://t.co/u1qhaIGGoC https://t.co/12AYQD2Y66
Central Bank Rate Decisions to Take A Backseat to Broader Fundamentals

Central Bank Rate Decisions to Take A Backseat to Broader Fundamentals

2012-02-09 12:47:00
Joel Kruger, Technical Strategist
Share:
  • European Central Bank and Bank of England follow through as expected
  • Investors still waiting on finalization of Greece agreement
  • China inflation data puts government in uncomfortable position
  • Yen and Franc continue to show signs of deterioration from recent strength
  • UK industrial, manufacturing production better than expected
  • Check out our new real time news and commentary report, “Market Vibrations

Thursday is a day of event risk with both the Bank of England and European Central Bank deciding on policy. The Bank of England has already come out and left rates on hold as was widely expected, while upping asset purchases in line with consensus estimates of 50B to GBP325B.This has helped to open some relative outperformance on the day, with Sterling traders perhaps relieved that QE was not increased by more than GBP50B. The ECB has also come out and left interest rates unchanged at 1.00% as expected.

However, unlike other rate decisions, these central bank policy decisions are likely to take a backseat to more risk sensitive themes in the form of the Eurozone crisis and ongoing Greek saga. Many are expecting that a Greece deal will get done at any moment, and this should help to bolster sentiment somewhat, but with technical studies showing risk correlated assets looking overdone, we wonder how much more the Euro and other risk sensitive currencies have in the tank before once again relenting to broader pressures and rolling back over.

Relative performance versus the USD Thursday (as of 12:35GMT)

  1. GBP +0.35%
  2. NZD -0.08%
  3. CAD -0.13%
  4. AUD -0.16%
  5. EUR -0.17%
  6. CHF -0.20%
  7. JPY -0.21%

Elsewhere, Chinese government officials are certainly not pleased with the latest inflation results, with the data coming in hotter than expected and making the PBOC’s job all the more difficult. A combination of a slowing economy and rising inflation is a mixture that other economies have struggled to contend with throughout the global crisis, and this makes China’s job significantly more challenging. We continue to see the China risk as one that has not yet appropriately been priced into markets, and a risk which ultimately will more heavily on currencies like the highly correlated Australian Dollar.

Moving on, the Yen and Franc have been quietly depreciating from key levels in recent sessions and it will be interesting to see if both these currencies can continue to show signs of more significant deterioration ahead. Technically, price action in EUR/USD will be the most critical as far as gauging directional bias, and although we feel that additional upside should be limited from here, we see risks for gains to extend towards 1.3400 before the market attempt to carve the next medium-term lower top.

ECONOMIC CALENDAR

Central_Bank_Rate_Decisions_to_Take_A_Backseat_to_Broader_Fundamentals_body_Picture_5.png, Central Bank Rate Decisions to Take A Backseat to Broader Fundamentals

TECHNICAL OUTLOOK

Central_Bank_Rate_Decisions_to_Take_A_Backseat_to_Broader_Fundamentals_body_eur.png, Central Bank Rate Decisions to Take A Backseat to Broader Fundamentals

EUR/USD: The latest multi-session consolidation has been broken, with the pair clearing resistance at 1.3235 and now opening the door for a test of the next key level in the form of the 100-Day SMA just over 1.3300. Given the recent consolidation range of approximately 200 points (1.3025-1.3235), we will leave the door open for a move towards the 1.3450 area before the market eventually looks to stall out and carve a more meaningful lower top ahead of broader underlying bear trend resumption. A break back below 1.3025 is now required to officially alleviate immediate topside pressures.

Central_Bank_Rate_Decisions_to_Take_A_Backseat_to_Broader_Fundamentals_body_jpy2.png, Central Bank Rate Decisions to Take A Backseat to Broader Fundamentals

USD/JPY:The market could once again be looking to carve an interim base after setbacks stalled shy of the record lows from October by 75.55. A bullish reversal day from last Friday has shown some decent follow through and the latest daily close back above 77.00 should do a good job of alleviating immediate downside pressures and reintroducing longer-term basing prospects. From here, look for an acceleration of gains back towards next key resistance by 78.30 further up. Back under 76.50 would negate outlook and give reason for concern.

Central_Bank_Rate_Decisions_to_Take_A_Backseat_to_Broader_Fundamentals_body_gbp2.png, Central Bank Rate Decisions to Take A Backseat to Broader Fundamentals

GBP/USD: The latest break back above 1.5800 now compromises a multi-week consolidation, with the pair now looking to push towards next key resistance by 1.6000. However, despite the upside move, we see any additional gains from here as limited and would look for a topside failure somewhere around 1.6000 in favor of a bearish resumption. Daily studies confirm and are starting to look stretched as well. A close back under 1.5730 will also suggest that the market has peaked out for now in favor of bearish resumption.

Central_Bank_Rate_Decisions_to_Take_A_Backseat_to_Broader_Fundamentals_body_swiss1.png, Central Bank Rate Decisions to Take A Backseat to Broader Fundamentals

USD/CHF: Although our overall outlook remains intensely bullish, the market is in the process of some interday corrective activity before the next major upside extension beyond 0.9600 and towards parity. However, look for any setbacks to be very well supported into the 0.9000 area, with the level representing a key psychological barrier and also coinciding with the lower Bollinger band. For now, a break back above 0.9265 will officially be required to confirm outlook and alleviate immediate downside pressures.

--- Written by Joel Kruger, Technical Currency Strategist

To contact Joel Kruger, email jskruger@dailyfx.com. Follow me on Twitter @JoelKruger

To be added to Joel Kruger’s distribution list, send an email with subject line “Distribution List” to jskruger@dailyfx.com

Click here for our new real time news and commentary report, “Market Vibrations

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.