Citi… Spot EUR: Dueling doves: FXWW

From the FXWW Chatroom – The ECB and the Fed are in a dovish arms race at the moment with major policymakers speaking over the weekend about their hot button topics. For the ECB, Coeure made it clear that TLTROs are on the table for March. As for the Fed, Dudley threw his hat into the ring on symmetric inflation targeting which will keep short term rates lower.

For now, it appears that the Dudley rhetoric is driving EURUSD with a rally to 1.1325 overnight. This has been the sell zone for the past week, but its unclear where we go from here. I thought that the break lower through 1.13 would materialize by now, but every dip is bought aggressively. The 200 hour MA, which we haven’t traded above since February 5, comes in at 1.1317 right now.

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