The week started with nothing extraordinary and most majors pairs move sideways so far. The Key economic release of the day released earlier with German Ifo Business Climate came in at 107.3 versus the 108.5 expected, nonetheless the EUR did not react.
The week ahead keep us busy since three central banks meeting are taking place. Although FEB, RBNZ and BOJ are all expected to keep their rates unchanged surprises may happen on the rhetoric the will use. During the FOMC meeting the interest rate is speculate to be unchanged at 0.50%. The chance of a March rate hike postpone due to the recent ‘’chaos’’ in the stock and energy markets. Traders would be eager to know how the recent drop in oil and global stocks would change Fed’s view of the economy. Analyst believe that Fed will possibly wait until the financial markets further stabilize. RBNZ is expected to keep the overnight cash rate unchanged at 2.50% on Thursday. Remember that in December, the central bank already cut the OCR by 25bps and commented that they will reduce rates if circumstances warrant. BoJ will also do not modify the monetary policies but most probably governor Kuroda will comment the Japan inflation target and the possibility of more easing.
View our full economic calendar for a daily roundup of major economic events.
Data releases to monitor:
EUR: German Buba Monthly Report, Belgian NBB Business Climate, ECB President Draghi Speaks
GBP: CBI Industrial Order Expectations
Trade Idea of the Day
Currently the pair is trading at 0.9912. Traders must monitor the 1.0157 resistance level and the support level 0.9825 for possible breakouts. A possible scenario would be a further downwards movement and break of 0.9885 with target the 0.9825 area. An alternative scenario would be a break of 0.9954 resistance with target the 0.9986 area.
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