Both lower-yielding currencies were able to benefit from risk-off flows last week. Will the same hold true this time?
Or will the ECB decision shake things up?
Mid-tier euro zone data (starting Mar. 9, 7:00 am GMT)
- German industrial production to rebound by 1.7% after earlier 3.5% slide
- Euro zone Sentix investor confidence index to slip from +5.2 to -11.0
- French private payrolls to show another 0.2% increase in hiring
- French industrial production to recover by 1.8% after previous 2.8% slump
- Euro zone industrial production to pick up by 1.4% after earlier 2.0% drop
ECB monetary policy decision (Mar. 12, 12:45 pm GMT)
- No actual changes to 0.00% interest rate expected
- Pressure for the central bank to ease has been mounting now that the Fed announced an emergency 0.50% rate cut
- Analysts expect some form of stimulus as outbreak worsens in Italy
- Several ECB policymakers don’t think action is warranted just yet, especially since economic data has been mostly upbeat
Overall market sentiment
- The franc and the euro have been able to take advantage of risk-off flows stemming from worsening coronavirus headlines.
- Another week of rapidly rising cases and fatalities could extend flight to safety while indications that the outbreak is being contained could spur profit-taking.
- Long-term trend strength analysis shows that most euro pairs are on bullish ground.
- RSI is painting a mixed picture, although majority of euro pairs are in overbought territory.
- EUR/AUD, EUR/CAD, EUR/NZD, and EUR/USD are all giving off bearish vibes.
- Meanwhile, stochastic is showing that most franc pairs are on bullish ground.
Missed last week’s price action? Make sure you check out the EUR & CHF Weekly Review for Mar. 2 – 6!