17 Apr 2014 03:19GMT
EUR/USD - 1.3840.. Today's rebound due to intra-day rally in cable is frustrating euro bears as despite hitting session high of 1.3851 in Europe on Wed, the release of the eurozone annual inflation data for Mar at 0.5%, the lowest since Nov 2009, knocked euro lower, price later fell to 1.3804 in NY.
Many economists believe eurozone inflation is what ECB President Mario Draghi called a danger zone when CPI is below 1%. Therefore, the ECB may be pressured to take some kind of monetary easing in its next policy meeting. In addition, recent euro strength has made many ECB policymakers uncomfortable as the strg euro makes imports cheaper n prices for imported goods n services lower, thus lowering inflation expectation.
Traders bot eur/usd at Asian open when cable shot abv Feb's 4-year high at 1.6823 on stop buying, euro quickly followed suit n rose to 1.3841/42 after tripping stops abv 1.3833 n more stops abv Wed's high of 1.3851 are now in focus. Buying the single currency on dips for gain twd 1.3660-70 area in Asia is therefore the favoured strategy due to dlr's intra-day broad-based weakness but traders shud not be too optimistic as sharp gain beyond there is unlikely to be seen ahead of the long Easter holiday n last Fri's 3-week peak at 1.3906 is expected hold today.
For now, bids are placed at 1.3820-10 n around 1.3800 with stops emerging below 1.3790, whilst offers are noted at 1.3860-70 n 1.3890-00.
Today, Germany will release its latest PPI at 06:00GMT n market is forecasting the data to come in at 0.0% m/m n -0.7% y/y vs prev. readings at 0.0% n -0.9% respectively. With the potential for eurozone QE looming, traders will be watching the release closely to gain insight into the possible future of ECB monetary policy.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.