ECB meets today but don't expect fireworks to follow
The dollar is keeping slightly weaker again today as yields continue to take a breather amid the pause in the reflation narrative. Equities continue to surge higher, continuing its good form after the long weekend with the market cheering on Biden's inauguration.
With the market settling down after all the focus on spending/stimulus early on, the Fed put is still the quiet and key driver playing out in all of this. That continues to leave a negative mark on the dollar and a positive one for risk assets and precious metals.
AUD/USD is up by another 0.3% looking towards 0.7800 while NZD/USD is back above both its key hourly moving averages in a push just above 0.7200.
EUR/USD also managed a modest bounce back above 1.2100 and its 100-hour moving average to 1.2130 now, nearing a test of its 200-hour moving average again.
This comes as EUR/GBP snuck higher towards the latter stages of yesterday and closed just below key support at 0.8866-67, with the close looking rather unconvincing of a major break in my view - at least for now.
Elsewhere, gold and silver tracked higher with the former breaking away from its recent consolidation range and targeting the 100-day moving average and 50.0 retracement level of its recent swing to the downside; both levels just above $1,880.
Looking ahead, the ECB will be the key focus in the session ahead but it should be a rather non-event as the central bank will want to stay on the sidelines for as long as they can afford to following their "recalibration" in December.
0745 GMT - France January business confidence
Prior release can be found here. A general read of French confidence levels, which should keep more or less the same as December with the virus situation still tense and vaccine optimism offering some hope for the remainder of the year.
1100 GMT - UK January CBI trends total orders, selling prices
Prior release can be found here. The CBI readings are a survey on manufacturers to rate the level of volume for orders expected during the next 3 months. A minor data point.
1245 GMT - ECB announces January monetary policy decision
The December decision can be found here. After the "recalibration" last month, don't expect much - if anything at all - from the ECB today. The language and commentary should echo that seen in the December statement as they will adopt a more 'wait and see' approach now, awaiting further developments in the virus situation, vaccine rollout,inflation pressures, and euro currency movement.
1330 GMT - ECB president Lagarde press conference
There shouldn't be much for Lagarde to say this time around but if anything, just watch for any mention in the euro and how comfortable they will be to see through any rise in inflation in the coming months. Other than that, she might want to address the Bloomberg report yesterday on the ECB stepping in to control the yields spread - at least refute it so as to not seem so obvious that they have been doing it all along.
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
