ECB aftermath, Dollar weakness and risk sentiment analyzed

Frank Walbaum FX Strategies.Asia

Important news for the day

Fri, 18th, 08:00 CET UK Retail sales

ECB rate cut

As previously expected the European Central Bank had reduced rates by 25 basis points to 3.4%. The communication from Christine Lagarde thereafter did not offer a major news and hence the Euro fell slightly as a result. The policy of the Bank will remain restrictive and data dependant. A general underlying economic weakness in the Eurozone has been acknowledged. The german DAX had yet stayed positive and might offer further upside potential. A breakout to higher levels might be in the making.

Market talk

The Dollar might show some signs of a bearish reversal before the end of the week. The Dollar Index might face some downside potential and if it would close below the 50- moving average based on the weekly chart some weakness in the Dollar might return. Vice versa the same can also be seen in the EURUSD currency pair. The price currently trades below the same moving average on the weekly chart but could be ready to trade back above it, which might hence indicate some positive sentiment for the Eurozone. On another note precious metals have started to gear up steam again. Gold keeps running higher and Silver might be ready to break to the upside should the USD 32.00 level be cleared.

Tendencies in the markets

Equities positive, USD weaker, cryptos positive, oil sideways, metals stronger, JPY weaker.

Author

Frank Walbaum

FX Strategies.Asia

Frank has been working in the TV business for several years. Acquiring his skills in Germany’s biggest broadcasting station, he then chose to work and live in Asia, which was in 2007.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.