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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.

Technical snapshot

EUR Pairs Trend Strength Analysis from MarketMilk
EUR Pairs Trend Strength Analysis from MarketMilk
  • 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.
EUR Pairs RSI from MarketMilk
EUR Pairs RSI from MarketMilk
  • Meanwhile, stochastic is showing that most franc pairs are on bullish ground.
EUR Pairs Stochastic from MarketMilk
EUR Pairs Stochastic from MarketMilk

Missed last week’s price action? Make sure you check out the EUR & CHF Weekly Review for Mar. 2 – 6!