Thursday’s session was all about the ECB meeting, with much focus on recent reports that the governing council were considering how to taper QE, but which were later denied. This was once again denied at the press conference, as was any talk of QE extension beyond Mar 2017, though president Draghi maintained that this was still an option if warranted.
December is due for a review, so EUR bears will refer to this for justification. After a snap up through 1.1000, sellers then regained control – after topping out ahead of 1.1050 – to send the pair through the initial support at 1.0950, and stabilising below this level keeps the key 1.0900 mark under threat. Below here lie some notable stops, but more supported anticipated into/from 1.0800.
The impact on the crosses have been less significant however, with Cable following lower through the 1.2200’s but holding the figure to keep EUR/GBP comfortably above .8900. At the time, the EUR/USD rally through 1.1000 saw the cross rate ramped up to .9025, but this was also hit hard as Cable bids ahead of 1.2200.
Softer than expected UK retail sales have been leaning on the pound today, but the initial reaction to the data was limited at best. EUR/JPY gains through 114.00 were also swiftly reversed, and even though USD/JPY is challenging 104.00 again on buoyant stocks, the cross rate continues to eye a move on the lows under 113.50.
EUR/CHF is getting pressed into the low 1.0800’s, but the last time we were at these levels, touted ‘intervention’ was said to have held the figure. USD/CHF is now hitting fresh highs through .9900 so with all the above, the USD index is hitting fresh 7+ month highs, with 98.5055 from March, when the ECB last added stimulus.
AUD/USD is now back in the low .7600’s after the late ramp up through .7700 this time yesterday, with the weak jobs report overnight turning the market here. USD/CAD is back above 1.3200 again, but this is all on USD strength rather than oil price. NZD/USD is back under .7200 after topping out at .7265 overnight, following the rest of the crowd for now.