The ECB President caught many traders by surprise with his dovish tone and hints of further stimulus if deemed necessary. This news has weakened the EUR and helped to lift global stocks but, the big question is, for how long? There is some EUR Manufacturing PMI data due out of France and Germany tonight and yet another ECB President Draghi speech so this landscape could well change!
NB: I am away from tomorrow morning, Friday, until next Tuesday on a break. Updates will be brief and few during this period.
USDX daily: this index is finally moving higher but a triangle breakout needs to evolve and, then, the major S/R 100 level will have to be negotiated. I’m not all that inspired by this rather tepid move higher given the underpinning ECB news. The things that might be holding the US$ back however, that I can think of at least, are thoughts that US rate hikes might be delayed if other economies are still in major stimulus mode and concern about the recent bout of ‘risk off’ behaviour, especially if it returns.
EURX daily: weaker with thoughts of further ECB stimulus:
Gold weekly: holding up near the $1,100 despite the stronger US$ but the thought of more easing would be helping here:
Oil monthly: Oil has bounced back a bit but, really, the monthly candle close needs to be seen. Any monthly close back above $33.50, the Feb 09 low, would be impressive and support a potential bullish-reversal ‘Double Bottom’. A monthly close below this though would suggest a test of the $20 and, maybe, even $10 levels.
S&P500 weekly: the index is still holding above the monthly support trend line and, like with Oil, traders really need to see where this closes for the month. A close below the trend line would be bearish and suggest, to me at least, that a test of 1,600 could be on. A hold above this trend line means the index lives to battle on another day:
Forex: I don’t have any new TC signals for the time being given the choppy action seen on many pairs.
Data: Traders need to watch for French & German Manufacturing Production PMI, the Draghi speech, GBP Retail Sales and CAD CPI & Core Retail Sales data.
E/U daily: this ECB news might finally trigger a daily triangle breakout. Watch for any impact from tonight’s Draghi speech and the PMI data:
E/J 4hr: still holding above the 126.50 level and there is little momentum evident. Watch for any impact from tonight’s Draghi speech and the PMI data:
A/U 4hr: higher with thoughts of more stimulus and some recovery with the price of Oil:
A/J 4hr: this ‘risk barometer’ is a bit higher too:
Cable 4hr: not enjoying too much of a bounce here yet. Watch for any impact from GBP Retail Sales:
Kiwi 4hr: like the A/U, enjoying the current cheery sentiment and trading higher:
U/J 4hr: still chopping around either side of the 117 level:
GBP/JPY 4hr: this is back above the key 167 level. Watch for any impact from GBP Retail Sales:
USD/CAD 4hr: weaker with the stronger CAD$ following some recovery with Oil and the BoC interest rate hike. Watch for any impact from tonight’s CAD CPI and Retail Sales:
EUR/AUD 4hr: back below that major 1.55 level! Watch for any impact from tonight’s Draghi speech and the PMI data:
GBP/AUD daily: still bouncing around within the descending trading channel. Watch for any impact from tonight’s GBP Retail Sales:
EUR/GBP weekly: this pair continues struggling at 0.77 S/R but I’m open to a test of the breakout 0.75 level anyway. Watch for any impact from tonight’s Draghi speech and the PMI data as well as GBP Retail Sales:
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