EUR/GBP: bears eye 16-month-old support

EUR/GBP: bears eye 16-month-old support

2021-02-17 • Updated

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Ichimoku Kinko Hyo

NZD/JPY: The pair is trading below the cloud. A downward pressure would lead the pair to exit further the cloud, confirming a bearish outlook.

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Fibonacci Levels

XAG/USD: Silver continuous to stand below the 38.2% retracement area. The bearish pressure is growing.

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EU Market View

Asia-Pac equity markets traded mostly lower after the lackluster handover from Wall Street. WTI crude futures hovered around the USD 60/bbl level. The winter storm stateside is said to have hit US oil output by as much as a third. Overnight on Wall Street, the Dow Jones was helped to a record closing high by gains from banks, which benefit from higher yields.

US Treasury yields hit one-year highs on Wednesday, lending support to the dollar but pressuring lofty valuations for stocks, as investors reckoned that a stimulus-fuelled global recovery will eventually bring rising inflation. The gap over two-year yields also opened to its highest level in nearly three years, as traders figure that short-term monetary policy will stay supportive, even as the world bounces back from the pandemic.

The dollar gains against low-yielding currencies on Wednesday, hitting a five-month high against the yen as US bond yields jumped on the prospects of further economic recovery.

Looking ahead, highlights from the macroeconomic calendar include UK CPI, Retail Sales, Industrial Production, Canadian CPI, FOMC Minutes, Fed's Rosengren, Kaplan, BoE's Ramsden speeches. 

EU Key Point

  • Germany reports 7 556 new coronavirus cases, 560 deaths in the latest update today.
  • US President Biden to meet with labor union leaders on investment in infrastructure.
  • US President Biden on 1.9tln relief package supports ‘’now is the time to go big’’.
  • EUR/USD risks a move to 1.2045.

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Even though we've only witnessed sluggish movements from the Dollar over the past few weeks, the general idea and bias still seem intact and untampered. The bullish impulse however can be seen as "searching for support".

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