AUD/USD: 0.8985EUR/USD: 1.3735The markets remain relatively calm as tensions ease in Crimea and the focus is now turning towards today's ECB/BOE meetings and then to tomorrows US Jobs/NFP data. Sterling had a strong session following decent UK data, re-awakening thoughts of a BOE rate hike. - not today though. Other data today will include Australian Retail Sales/Trade Balance and German/US Factory Orders, although most of the focus will be on the ECB and on Mario Draghi's Press Conference.
It has pretty much been another non event for the Euro, stuck in a 40 point range, with the markets seemingly sitting on the sidelines waiting for the next move in the Russia/Ukraine stand-off, with the days data having little effect either way. The Q4 EU GDP came in as expected at 0.3%, while retail sales rose 1.6% mm in January versus expectation of 0.9% mom. In the US the data was soft, and the ADP jobs report grew by just 139k in February (exp 150k), while January was revised sharply lower from 175k to 127k, which does not auger well for the NFP/Jobs report due on Friday (exp 150K).
Once again there is little change to the technical picture but that could change after the ECB I/R decision due later today. The general view seems to be that there will be no change, although there could be some sort of easing/stimulus to help boost growth. We shall have to wait and see. The the IMF weighed in and called for the ECB to cut rates as well as implement a new LTRO or QE, which helped to keep a lid on the Euro, but 1.3700 support was not troubled. If the ECB do cut, then the Euro will head lower, but if they do nothing we could see a squeeze higher although I am doubtful of heading above the strong 1.3835/30 resistance ahead of tomorrow’s Jobs data.
Below today’s 1.3707 low, a break of rising trend support, now at 1.3690, would head back towards last week’s 1.3643 base, below which 1.3610 (61.8% of 1.3475/1.3824) would be the target but probably not today. If wrong, the next objective would be 1.3560 (76.4%).
On the topside, 1.3780/90 will again find decent sellers ahead of 1.3800. Above here, the strong resistance at 1.3825/30 (61.8% of 61.8% of 1.4939/1.2042), where the descending trend resistance going back to 2008 lies, and will not be easily overcome. If we do get above 1.3830, the next target would be 1.3892 (27 Dec high) and then 1.3950 (50% of 1.6037/1.1876/ Monthly cloud top). Above 1.4000, then don’t sand in the way, as I do not see a lot to stop it heading to the Oct 2011 high of 1.4246, which is also 76.4% of 61.8% of 1.4939/1.2042.
It looks like being another tight session until the ECB, stuck mostly between 1.37/1.38. The short term indicators are flat and thus a neutral stance is required for now. Wait for Mario Draghi and then go with the flow. I suspect he might indicate a small easing (10-15 bp) and thus would rather be short than long, but it is pretty much a toss of the coin.
Economic data highlights will include:
German Factory orders, ECB I/R Decision, US Jobless Claims, US Factory orders
Jim LanglandsFX Charts www.fxcharts.com.au
