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.
Risk-averse sentiment prevails on the market
- The market sentiment deteriorated because of the election uncertainty and worries about rising virus cases all over the world.
- Germany and France imposed lockdowns to stop the Covid-19 spread. The euro dramatically dropped.
- The Bank of Japan held a meeting and expressed optimism on the economic recovery. The central bank left policy settings unchanged, indicating that it has made enough already to support the economy.
- The Bank of Canada left rates unchanged at the record low of 0.25% for at least two years as the Canadian economy is slowly recovering from the coronavirus slump.
- Oil prices plummeted on fears for new lockdowns.
EUR/USD is trading inside of the channel. Since it has touched the lower trendline, the move up is quite possible. However, the fresh virus outbreak in Europe may weigh on the single-area currency. If it manages to close above the 200-day moving average, the way to the key psychological mark of 1.1800 will be clear. On the flip side, if it drops below yesterday’s low of 1.1730, it may fall to the key support of 1.1700. Follow the ECB report and press conference as it will impact the euro.
The Canadian dollar dipped yesterday amid the risk-averse sentiment, lower oil prices, and BOC’s report. Today the loonie is trying to rebound from its losses. If USD/CAD manages to drop below the low of October 6 at 1.3250, it may fall to the 200-period moving average of 1.3230. In the opposite scenario, the move above yesterday’s high of 1.3320 will drive the pair to October’s peak of 1.3340.
USD/JPY is taking a break after falling. If USD/JPY drops below yesterday’s low of 104.20, the way to the key psychological mark of 104.00 will be open. Otherwise, the move above the resistance of 104.50 will drive the pair to the high of October 22 at 104.85.
XAU/USD bounced off the support of $1 875, but if it manages to fall below it, the way to $1 850 will be clear. On the flip side, the move above the 100-period moving average of $1 890 will drive the yellow metal to the 23.6% Fibonacci retracement level of $1 900.
Follow further news:
- The US GDP in combination with unemployment claims will be out at 14:30 MT time.
- The ECB will make a statement at 14:45 MT time.
- The US pending home sales will come out at 16:00 MT time. Stay tuned!
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.