We’ve got a text book Fib pattern forming on EUR/USD, and hopefully today’s German and U.S. data will continue to bring in traders through the U.S. session.
Intermarket Snapshot
| Equity Markets | Bond Yields | Commodities & Crypto |
| DAX: 11500.51 +0.39% FTSE: 7117.57 +0.19% S&P500: 2761.85 +0.68% DJIA: 25424.22 -0.10% |
US 10-yr 2.637% +0.012 Bund 10-YR 0.06% -0.013 UK 10-YR: 1.177% -0.014 JPN 10-YR: -0.035% -0.002 |
Oil: 56.36 +0.25% Gold: 1285.10 -0.19% Bitcoin: 3838.00 -1.76% Etherium: 131.51 -2.84% |
Fresh Market Headlines & Economic data:
- U.S. retail sales rebound slightly in January a month after biggest decline in 10 years
- No 10 says meaningful vote will go ahead and plays down reports motion will be conditional
- U.K. Says Brexit Talks ‘Deadlocked’ Despite Appeal to EU for Help
- Auto woes drive dip in German industrial output
- German government lowers GDP forecast again – Handelsblatt
- Coeure Says ECB Not Reversing Course on Policy With New Package
- Japan M2 Money Stock Climbs 2.4% On Year In February
Upcoming Potential Catalysts on the Forex Calendar:
- BOE’s Haskel speaks in Birmingham at 13:00 pm GMT
- ECB’s Coeure speaks in Brussels at 10:30 pm GMT
- Australia Housing Finance at 12:30 am GMT (Mar. 12)
- NAB Business Conditions at 1:30 am GMT (Mar. 12)
- U.K. GDP m/m at 9:30 am GMT (Mar. 12)
- U.K. Manufacturing Production at 9:30 am GMT (Mar. 12)
What to Watch: EUR/USD
No big potential catalysts on the calendar for the rest of the Monday session, so I’m looking at EUR/USD as it could have residual volatility from today’s weak German economic updates (disappointing trade balance and industrial production data) and a better-than-expected read on retail sales from the U.S.
The reactions to both sets of data wasn’t very encouraging for potentially strong and/or directional moves ahead, but the current price action and patterns look like an opportunity for sellers at the moment.
On the one hour chart above, we can see EUR/USD has bounced to roughly the 50% Fibonacci retracement area after the bit hit lower from last week’s ECB event. We’re also seeing bearish divergence with the stochastic indicator, so without a fundie catalyst, technical traders could potential see this as an opportunity to short what seems like a new trend lower.
For the bulls, if we do get a fresh catalyst pumping up the pair higher to break the Fib area, then a long opportunity should be considered for a really short-term play. The R:R wouldn’t be great as the next potential resistance area is the major psychological level of 1.1300, but again, if you’re going for short-term pips then you can’t be too greedy when playing day trades unless the fundamental story supports a potentially strong move ahead.
