With no major catalysts today and risk-on sentiment still in firm control, we’re checking out this simple setup on EUR/USD for short-term pips.
Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on NZD/JPY after the upbeat RBNZ statement, so be sure to check that out to see if there is still a potential play!
Intermarket Snapshot
| Equity Markets | Bond Yields | Commodities & Crypto |
| DAX: 13734.55 +0.78% FTSE: 7534.29 +0.46% S&P 500: 3370.82 +0.39% DJIA: 29467.61 +0.65% |
US 10-yr 1.628% +0.038 Bund 10-YR -0.38% +0.01 UK 10-YR: 0.603% +0.033 JPN 10-YR: -0.04% +0.019 |
Oil: 51.39 +2.90% Gold: 1568.20 -0.12% Bitcoin: 10352 +0.57% Etherium: 255.68 +5.60% |
Fresh Market Headlines & Economic Data:
- Federal Reserve’s Patrick Harker says interest rates should ‘hold steady for a while’
- Coronavirus likely to hurt euro zone, UK growth: S&P Global
- Oil rises 3% as fall in new coronavirus cases in China eases fuel demand concerns
- Sanders edges out Buttigieg to win New Hampshire, as Klobuchar surges to third
- Industrial production down by 2.1% in euro area; Down by 2.0% in EU27
- Irish business must prepare for post-Brexit friction: central bank chief
Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:
- US Monthly Budget statement at 7:00 pm GMT
- Japan PPI at 11:50 pm GMT
- Australia Consumer inflation expectations at 12:00 am GMT (Feb. 13)
- RBA Governor Lowe speech at 12:15 am GMT (Feb. 13)
What to Watch: EUR/USD
Market volatility has definitely been on the light side for most of FX today, and with no highly likely market movers coming up on the calendar, we’re checking out this simple technical setup for today’s watchlist.
With market sentiment still positive on reports that the rate of new cases of the Coronavirus has slowed a bit, it makes sense to check out where traders are dumping safe havens for other assets. And that scenario seems to be pretty clear in EUR/USD as the trend has been a one way street since the beginning of February. The market recent consolidated in a roughly 20 pip range over the last session, but now we’re seeing a downside breakdown that may draw in more sellers.
Again, with no major catalysts coming up foreseen in the rest of the U.S. session and the upcoming Asia session, it’s likely momentum could push this pair lower, but likely at a slower pace. If you’re looking to grab a few pips before the Thursday session, riding the trend lower in EUR/USD may be the way to go.
Shorting from around current levels up to the top of the consolidation range makes sense as an entry strategy, and with a daily ATR of around 40 to 50 pips, reasonable exit points could be triggered by this time tomorrow. Also, setting a stop above the consolidation area (around 1.9025) using the daily ATR as a guide and targeting the next minor psychological level of 1.0850 makes for a strong short-term potential return-on-risk.