ECB in focus
Thursday 11 March 2021
Lots going on still but today we turn attention particularly onto the European Central Bank decision at 12.45 GMT and presser at 13.30 GMT where once again markets expect little action but plenty of cautious rhetoric, not least of which on bond yields and value of the Euro.
Last time out was much of a non-event but that never stops the hype each time so once we must ask how much of the dovish tones a) have been factored in given recent declines in the Euro overall despite some trimming back in past 24 hours and b) how much will actually be delivered by the ECB anyhow? Not long now until we find out. Lumpy options expiries between 1.1900-15 in play too.
As always the FX jury remains out still so we need to focus on price action and value for money in our entry and exit levels. Discipline and patience needed more than ever in these ever fickle/fragile times.
GBPUSD held 1.3860 then 1.3880 again yesterday and finally broke up through 1.3925-30 to test 1.3960 this morning as USD sentiment turns lower but some risk-on GBPJPY notable again. EURGBP has held 0.8550 again this morning and now testing 0.8580-85 again as the EURUSD rally this time outstrips the soggier GBPUSD climb. Much will depend now on the ECB to break this current tight range.GBPJPY has found a new base around 150.60 then 150.80 with USDJPY and risk mostly underpinned but failing around 151.60 this time with rally sellers on core pairs both poised still.
I remain poised to sell GBP into rallies as a jobbing preference but respecting dip demand still with price action ever fickle. Equally a case still for going long in the dips therefore as we continue to range at these lower levels. Patience, entry/exit level and not getting greedy remain key.
USDJPY is finding support at 108.30 still but equally failing above 108.80 as the variable/fickle tones continue.
EURJPY found a higher base at 129.00 then 129.40 on some better risk sentiment but now finding a good cap at 129.80-85.
EURUSD is finding decent 1.1880 support now and now pushing to 1.1965 amid some EUR position-trimming demand and USD weakness.Large option interest today should help support dips into/below 1.1900.USDCHF has fallen back through 0.9280 and 0.9260 as EURUSD rallied with EURCHF failing above 1.1100 and now testing 1.1060 bucking the EUR trend elsewhere ahead of the ECB later but with the SNB ever-watchful.
AUDUSD found a decent base at 0.7700 with those 0.7720-25 and 0.7750-55 expiries very much in play as per my tweets and after holding 0.7700 again on the subsequent retreat we're now back up testing 0.7780 amid softer USD/firmer risk tones with large expiry interest today between 0.7710-25 also helping to support.
USDCAD failed at 1.2680 this time amid softer USD and firmer oil tones but equally finding support at 1.2575-80 again atm.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.51 GMT