EUR/USD stabilizes near 3-y low

KBC Market Research Desk KBC Bank

On Friday, a promising calendar failed to overthrow reigning FX trading patterns. German/EMU Q4 growth were weak but EUR/USD stabilized in the mid 1.08 area. US retail sales and production were unconvincing. Michigan consumer confidence stayed strong. The dollar lost temporarily a few ticks, but EUR/USD still closed at 1.0831, the strongest since April 2017. The equity rally paused as markets pondered the balance between the economic fall-out of corona versus a favourable context of expected prolonged policy stimulus. USD/JPY held a tight sideways range in the upper part of the 109 big figure (close 109.78).

This morning, Asian/Chinese equity markets extended gains as the PBOC lowered the funding cost for medium-term loans and added liquidity to the market. Still the yuan gains marginal ground (USD/CNY 6.98 area). Japanese equities underperform and the yen weakens slightly after the country reported an unexpected sharp contraction in Q4 (-1.6% Q/Q) after the sales tax hike. USD/JPY is trading near 109.85. EUR/USD hovers in the 1.0835/40 area.
Trading will probably develop in rather thin market conditions today as US markets are closed for President’s Day. There are few eco data in EMU today. Later this week, we keep an eye at EMU confidence indicators, including German ZEW confidence (Tuesday) and the EMU PMIs Friday. Will uncertainty on corona put further pressure on the outlook for the EMU economy (and for the euro)?
The EUR/USD technical picture deteriorated substantially after breaking subsequent supports, including the 1.0879 2019 low. 1.0778 is the next reference (2017 gap). The pair is moving into oversold territory, but this factor alone is unlikely to trigger a rebound. A rise above the 1.0900 area would be a first tentative sign that pressure might be easing.

On Friday, EUR/GBP stabilized north of 0.83. Sterling maintained most of the gains against a weak euro for earlier last week. Investors hope that fiscal stimulus will support UK growth. This morning, UK house prices (Rightmove) were solid (0.8% M/M). Later this week, we receive an in extenso update on the UK economy with labour data, CPI, retail sales and confidence data. A rebound in activity/confidence after the election might support the sterling bid, despit the noise on the EU-UK trade talks.

Download The Full Sunrise Market Commentary Currencies

Author

KBC Market Research Desk

KBC Bank

EUR/USD hovers around nine-day EMA above 1.1800

EUR/USD remains in the positive territory after registering modest gains in the previous session, trading around 1.1820 during the Asian hours on Monday. The 14-day Relative Strength Index momentum indicator at 54 is edging higher, signaling improving momentum. RSI near mid-50s keeps momentum balanced. A sustained push above 60 would firm bullish control.

GBP/USD holds medium-term bullish bias above 1.3600

The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback.

Gold sticks to gains above $5,000 as China's buying and Fed rate-cut bets drive demand

Gold surges past the $5,000 psychological mark during the Asian session on Monday in reaction to the weekend data, showing that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Federal Reserve expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Weekly column: Saturn-Neptune and the end of the Dollar’s 15-year bull cycle

Tariffs are not only inflationary for a nation but also risk undermining the trust and credibility that go hand in hand with the responsibility of being the leading nation in the free world and controlling the world’s reserve currency.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.