Forex news from the European morning session 11 Mar

News:

  • Draghi: ECB's role is to maintain price stability
  • Draghi laments youth unemployment and points the finger at governments
  • ECB's constancio: There are limits to our negative rate policy - Livesquawk
  • Four ECB governing council members opposed yesterday's easing package - MNI
  • China new loans Feb CNY 726.6bln vs 1.2trln exp
  • IEA says there are signs that oil prices may have based
  • Japan's Suga says they are watching impact of ECB action on the markets
  • Kuroda says it will take time for negative rates to have an impact
  • German economy got off to a good start in 2016
  • BOE Feb survey sees 38% of public expect rate hikes in next 12 months vs 35% prev
  • ECB review: Don't get mad, get even
  • Option expiries 10am NY cut today 11 March

Data:

  • German CPI Feb final mm +0.4% as expected
  • Germany WPI Feb mm -0.5% vs -0.4% prev
  • Spain core Feb CPI mm +0.1% vs -1.6% prev
  • January 2016 UK visible trade balance -£10.29bn vs -£10.30bn exp
  • January 2016 UK construction output -0.2% vs 0.3% exp m/m
  • Italy industrial production Jan mm +1.9% vs +0.7% exp
  • China January-February FDI +2.70% vs +1.70% exp

It's been a steady morning with traders understandably treading cautiously after the ECB mayhem but we've seen some sold euro retreat before running into fresh demand.

Strong showings by European equity markets have helped traders make their mind up that yesterday's rally was somewhat overdone at this time and EURUSD has made its way back from 1.1170 to 1.1080 where it ran into decent support/bids that I highlighted in the order board post.

Similarly EURGBP has been down to look at 0.7750 support/demand from 0.7820 and EURJPY to test 126.00 from 126.60 but underlying dip demand in USDJPY has limited further losses. On the flip side good sell interest into 114.00 has also limited the top side.

EURCHF has also given up a few of its SNB-assisted gains yesterday to post 1.0946 from 1.1022 highs.

GBPUSD enjoyed the support given by EURGBP supply and bounced off an early test of 1.4250 to post 1.4310 before capping. AUDUSD similarly has made gains above 0.7500 again on the EURAUD selling.

USDCAD has been mostly on the back foot as oil prices remain firm but has found a little support around 1.3230 again

So it's the usual jury-out scenario after such a major move and traders seem equally divided at this time.