The European Central Bank publishes its monetary policy statement that includes an announcement of the interest rate on March 11, at 14:45 MT time.
EUR dropped as Covid-19 engulfed Europe
- The focus of traders’ attention shifted from Brexit and the US stimulus package to the coronavirus spread. The World Health Organization claimed that Europe has become the new Covid-19 epicenter. Some countries are thinking to impose lockdowns again.
- US data came out mixed yesterday. US Core Durable Goods Orders exceeded market expectations, while consumer confidence turned out worse than the forecasts. The US dollar closed green yesterday, but today turned to the downside.
- Australian Consumer Price Index for the third quarter came out almost as planned: 1.6% vs the estimate of 1.5%. Besides, the Trimmed Mean CPI, which excludes the most volatile 30% of items from CPI, came out slightly better. The market reaction was positive to the aussie.
- Oil rose on Tuesday as US Gulf producers shut production ahead of Tropical Storm Zeta.
Let’s look at the charts. EUR/USD has touched the lower line of the Bollinger Bands indicator, so we can assume that the reverse is close and the pair may move up today. If it jumps above the key psychological mark of 1.1800, the way to yesterday’s high of 1.1840 will be clear. In the opposite scenario, if it falls below the key support of 1.1750, the doors to 1.1700 will be open.
AUD/USD has surged due to the economic data. If it manages to break the 38.2% Fibonacci retracement level of 0.7160, it should then reach the high of October 14 at 0.7190. Otherwise, the move below yesterday’s low of 0.71250 will drive the price to the 23.6% Fibo level of 0.71000.
USD/JPY has sharply dropped. The way to the key support of 104.00 is open. If it crosses this level too, it may fall to the next round number of 103.50. In the opposite scenario, the move above the resistance zone of 104.85-105.00 will push the pair to the high of October 20 at 105.45.
Finally, let’s talk about gold. It has approached the significant resistance of $1 912. If it breaks it, it may jump to October’s peak of $1 925. However, the strong upper trendline may constrain its way up. So, if it fails to cross $1 912, it may fall to the support of $1 890 and then to $1 875.
The Bank of Canada will deliver the monetary policy report this evening and hold a press conference. Follow it and keep an eye on the Canadian dollar!
Fed Chair Jerome Powell will testify today at 19:05 MT time. This event is crucial for traders as the tone of the speech may set the risk tone for the markets for the next two weeks.
Non-farm payrolls, the most awaited economic report, will be out on March 5 at 15:30 MT time.
Saudi Aramco site was hit by missiles on Sunday - no damage to oil supply was taken, but investor fear drove the price into the upside. Time to trade the cooling off then!
Great news for oil bulls! OPEC and its allied producers agreed to expand output cuts for the next month.
The USD skyrocketed after Fed Powell’s speech. OPEC and allied producers agreed to extend production cuts for another month. Oil surged.