EUR/USD Halts Bearish Series; ECB on Course to End Easing-Cycle?

Talking Points:

NZD/USD Flirts with Former Support Following FOMC Minutes; Jun Expectations Remain Unchanged.

EUR/USD Fails to Extend Bearish Series; ECB on Course to End Easing-Cycle?

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NZD/USD Daily

NZD/USD Daily Chart

Chart – Created Using Trading View

  • NZD/USD pares a decrease from progressing this week as a Federal Open Market Committee (FOMC) Minutes destroy to lift seductiveness rate expectations, yet a span might face range-bound conditions over a residue of a month as it struggles to pull behind above a former-support section around 0.7240 (61.8% retracement) to 0.7270 (78.6% retracement); broader opinion stays slanted to a downside as cost a Relative Strength Index (RSI) safety a bearish trends carried over from a prior year.
  • Even yet Fed Fund Futures simulate singular expectations for a Mar rate-hike, executive bank officials seem to be adopting a some-more hawkish tone, with Dallas Fed President Robert Kaplan (a 2017 voting-member) arguing financial process should be normalized ‘sooner rather than later;’ in turn, a diverging paths between a Reserve Bank of New Zealand (RBNZ) and a Federal Open Market Committee (FOMC) might continue to teach a long-term bearish opinion for NZD/USD as marketplace participants still cost a incomparable than 60% luck for a pierce in June.
  • Lack of movement to reason above 0.7240 (61.8% retracement) to 0.7270 (78.6% retracement) might encourage range-bound conditions over a residue of a month, with near-term support for NZD/USD entrance in around 0.7100 (38.2% expansion) to 0.7120 (50% retracement).

EUR/USD Daily

EUR/USD Daily Chart

Chart – Created Using Trading View

  • The miss of movement to break/close next a Fibonacci overlie around 1.0470 (38.2% retracement) to 1.0500 (50% expansion) may encourage a incomparable liberation in EUR/USD generally as a span fails to extend a new array of reduce highs lows; in turn, a euro-dollar might bluster a downward trending channel from progressing this month, with a initial topside jump entrance in around 1.0600 (23.6% expansion), that also lines adult with a 50-Day SMA (1.0594).
  • Following a unsuccessful run during a Dec high (1.0873), a ongoing enlargement in a European Central Bank’s (ECB) change piece should keep a broader opinion for EUR/USD slanted to a downside, yet an updated news from Germany’s executive bank suggests a Governing Council is on march to interpretation a easing-cycle as ‘annual distinction was reduce than in a prior year since a Bundesbank lifted a risk provisions;’ even yet President Jens Weidmann remarkable ‘an expanded monetary-policy position is positively appropriate,’ a executive bank conduct argued expectations for a 2019 rate-hike ‘don’t sound absurd’ amid a ‘upward trajectory’ in a mercantile outlook.
  • With a ECB scheduled to slight a asset-purchases to EUR 60B/month starting in April, executive bank officials might boost their efforts to sentinel off a finish pretension and serve implement a other non-standard measures as Governing Council member Vitas Vasiliauskas argues ‘TLTROs are a really good instrument’ and goes onto contend that a executive bank can renew the bank loans if needed; in turn, a process assembly scheduled for Apr 27 might hoard increasing courtesy as a ECB appears to be softening a dovish outlook.
  • In turn, EUR/USD might theatre a incomparable liberation as an inverse head-and-shoulders formation appears to be holding shape, and a break/close above 1.0600 (23.6% expansion) might coax a pierce behind towards a former support section around 1.0660 (50% expansion) to 1.0680 (78.6% expansion).

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— Written by David Song, Currency Analyst

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