All eyes and ears are on the ECB subsequent!
Does the central financial institution have a hawkish shock up its sleeve or are bulls in for a disappointment?
Earlier than transferring on, ICYMI, yesterday’s watchlist checked out EUR/JPY’s bullish pattern pullback forward of the BOJ choice. Make sure to take a look at if it’s nonetheless a legitimate play!
And now for the headlines that rocked the markets within the final buying and selling classes:
Contemporary Market Headlines & Financial Knowledge:
Russian President Putin says Nord Stream fuel flows to renew this week
EU President von der Leyen reiterates “full cutoff” of fuel a possible state of affairs
Canadian headline inflation slowed from 1.4% to 0.7% vs. 0.9% forecast
Eurozone shopper confidence index slumped from -24 to -27
BOJ saved rates of interest on maintain and coverage unchanged as anticipated
BOJ Governor Kuroda: Is not going to hesitate to ease coverage additional if needed
Kuroda: Speedy JPY weakening is undesirable
Tokyo to hike COVID-19 medical alert to highest stage
Italian PM Draghi says he’ll resign as coalition celebration loses assist
ECB financial coverage choice at 12:15 pm GMT
U.S. Philly Fed index at 12:30 pm GMT
ECB press convention at 12:45 pm GMT
Australia’s flash PMI readings at 11:00 pm GMT
Use our new Foreign money Warmth Map to shortly see a visible overview of the foreign exchange market’s value motion! 🔥 🗺️
What to Watch: EUR/AUD
Able to commerce the ECB choice?
Right here’s a easy pattern play I’m watching on EUR/AUD.
As you’ll be able to see from the chart above, the pair has been trending decrease on its hourly time-frame. A check of the descending channel resistance appears to be underway.
Are euro bears more likely to leap in throughout the ECB occasion?
The central financial institution is broadly anticipated to announce a 0.25% rate of interest hike, which might be its first one in over a decade however nonetheless more likely to be a disappointment for a lot of.
In spite of everything, the area is already scrambling to take care of surging inflation, so ECB policymakers are below stress to do extra to be able to hold costs in verify and keep away from a recession.
In different phrases, a 0.25% hike could be too little too late.
It doesn’t assist the shared forex that Italy could be dealing with a political upheaval, as PM Draghi stated that he would resign now that his coalition celebration failed to attract sufficient assist.
Nonetheless, the ECB would possibly get artistic with different coverage tightening instruments and share deets on its anti-fragmentation device. TBD if this will likely be sufficient to maintain the euro afloat, although.
In any case, be careful for EUR/AUD reversal candlesticks across the 61.8% Fib, which occurs to coincide with the 100 SMA dynamic inflection level.
This transferring common is under the 200 SMA to substantiate that the selloff is extra more likely to resume than to reverse, probably taking the pair right down to the swing low on the 1.4750 space subsequent.
Stochastic remains to be heading north, nonetheless, so there might be room for a better pullback till the 200 SMA dynamic resistance.
Both manner, be certain to observe correct danger administration when buying and selling round an enormous information occasion!