Video: Euro and Oil Quiet Through ECB and OPEC, Now for NFPs...
- The Euro slipped after ECB holds its ground, pulling EUR/USD back towards 200-day MA and holding EUR/GBP H&S break
- NFPs is top event risk ahead with both US equities and Dollar wrestling with resistance
- OPEC's meeting ends without reductions in output - as expected - and oil's lack of reaction shouldn't reassure
Having trouble trading in the FX markets? This may be why.
We are at a point where the market must seriously weigh convictions. With the S&P 500 just below record highs, Dollar just below its 200-day moving average and oil holding below 50; a complacent climb is no longer an option. Generating the kind of conviction necessary from these levels - bullish or bearish - is no small task. The crowd needs to get behind the move, and that is especially true if we are clearing resistance on any of these market benchmarks.
Neither the ECB rate decision nor OPEC would give a firm footing for decisive moves behind bigger themes like general risk trends or divergent monetary policy. As expected, the central bank maintained its bearing after taking extraordinary steps in December and March - and merely maintaining its exceptional accommodation doesn't seem to be enough. OPEC once again rejected rumors and committed to no production limits.
The NFPs ahead may very well turn in an in-line outcome. However, the deeper veins this event risk taps may leverage the impact of the data regardless of the outcome. Focus on US monetary policy has intensified sharply over the past three to four weeks. The Fed is making a concerted effort to warn that a hike is a high probability at either the June or July meeting; and the implications reach far wider than just the US Dollar. Divergent monetary policy across the world's largest players can lead to blowback to struggling doves and undermine global risk trends. We look at the fundamental scenarios ahead alongside the key technical levels in today's Trading Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.