Daily thread to exchange ideas and to share your thoughts
Good day, everyone! Hope you're all doing well as we get things going on the session. It's been a rather slow start to proceedings so far with the only notable mover being the aussie. All the focus will turn towards the euro as we have PMI data to come before the ECB and Draghi takes center stage later today.
The greenback is mildly higher against the rest of the major bloc but to be fair, there isn't much in it so far. The aussie stays weak trading near the 0.7100 handle against the greenback after NAB joined the rest of the "Big Four" Australian banks in raising their mortgage rates.
Risk is still looking a little indecisive as US equity futures and Treasuries are flat on the day thus far. European equities have so far taken a bit of a cue from Asian trading but as mentioned earlier, it's more of the case that investors are of the view that the glass is half-full than it being half-empty. There isn't much conviction for a real risk rally/rout just yet.
I reckon the euro is still worth a trade ahead of the ECB and Draghi later today as the near-term moves will be dictated by the PMI prints to come. I'll be keen to short the single currency if price approaches near 1.1400 on the back of any positive data but a break of the 100-hour MA will also present a neat scalping opportunity to take advantage of the dovish pricing ahead of the events later today.
As for Draghi himself, I would expect him to reiterate and acknowledge the economic slowdown but also continue to identify that such a slowdown won't lead to a recession. That's the script he'll likely stick to later today and unless the ECB materially turns more dovish by changing its risks assessment and talking down the economic outlook - which I only see them doing in March - then EUR/USD downside may well be contained near 1.1300 once again.
What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.
