Forexlive Americas FX news wrap: ECB keeps rates unchanged but increases the speed of PEPP purchases – ForexLive

Forex news for NY trading on March 11, 2021.

A summary of some of the “other” markets is showing:

  • Spot gold fell $-3.07 or -0.18% at $1723.56
  • Spot Silver fell $0.08 or -0.33% at $26.12
  • WTI crude oil futures rose $1.68 or 2.16% at $66.12
  • The price of Bitcoin, is trading up $770 or 1.36% at $57,684. The high price reached $57,950. The all time high is at $58,367 on the Bitcoin exchange. 

The ECB kept rates unchanged as expected and see a modest increase in GDP growth in 2021 (4.0% vs 3.9% in December) and higher inflation (1.5% vs 1.0% in December), but the inflation rate remains below the 2% target.  The central bank did say they would increase PEPP (pandemic emergency purchase programme) at a faster rate, but did not say by how much. She did say that it was not in an effort to exert yield curve control (as a result of the move higher in longer term rates more recently).  The EURUSD initially moved lower (staying below the 200 hour MA in the process), but after falling back to unchanged on the day, the pair moved higher and is closing near the highs for the day. 

In the US, the initial jobless claims fell to 712K from 754K the previous week. The good news is the number represents the lowest number in the cycle since the start of the pandemic in March 2020. The bad news is that it’s still 712K new initial jobless claims.  

The S&P closed higher for the 3rd consecutive day, made new all time intraday highs at 3960.27, and also closed at a record. The Dow closed higher for the 5th day in a row and it closed at record levels for the 3rd consecutive. The Nasdaq index led the charge today but still remains 5 1/2% from the all time high reached on February 26th. The bullish news for the Nasdaq is that it closed above its 50 day MA at 13358.27.  PS the Russell 2000 closed at a record high.  In Europe shares closed higher across the board. The German Dax closed at record levels for the 3rd consecutive day.  Below are the ranges and changes for the major indices today. 

Forex news for NY trading on March 11, 2021._

In the USD debt market, the US treasury successfully completed the weekly note and bond refunding by auctioning off $24 billion of 30 year bonds at a high yield of 2.295% (it would be a story if they couldn’t successfully complete the auction but from demand standpoint, the auctions were a “success”).  Although the tail was 0.5bps, the Bid to cover was near averages and the “directs” support was decent. The yield on the 30 year moved lower after the auction and is trading at 2.276% near the end of day.  

Yields are mixed in the USIn the forex market, the CAD was the strongest. The JPY was the weakest. The USD is closing lower as well and just ahead of the JPY as the weakest. The USDJPY was only stronger vs the JPY by 0.07%. It fell by -0.71% vs the CAD and 0.70% vs the  AUDUSD. Below are the % changes of the majors currencies vs each other along with the ranking of the currencies from strongest to weakest. 
The US dollar is weaker

What are the technicals saying as the market moves into the new trading day (and final day of the week)?  Below is a summary for the major currencies vs the USD:

  • EURUSD: The EURUSD moved above the 50% of the March trading range at 1.19739. Before that break, the pair moved above its 200 hour MA at 1.19654. The high just reached 1.19894 that is just short of the next target at the March 2 low at 1.19907. The 61.8% of the March trading range is at 1.2006 – just above the natural resistance at 1.2000.  The 100 day MA – which was broken last week and ran lower – is up at 1.20349. I would expect sellers against that MA if the momentum higher continues. 
  • GBPUSD: The GBPUSD moved above it 38.2% retracement of the move down from February 24 cycle high (highest level going back to April 2018). That retracement level came in at 1.39546.  The pair is trading at its highs at 1.39902 at the moment, and looks toward resistance between 1.39988 and 1.4009 (which is the 50% midpoint of the move down from the Feb 24 high)  That area it is home to a number of swing areas from March 1, March 3, and March 4.  Look for sellers with stops above 1.4009. 
  • USDJPY: The USDJPY as traded in a up and down narrow range today. The low to high trading range was 48 pips. That is short of the 61 pip average over the last 22 trading days. Technically, the price traded above and below its 100 hour moving average and a rising trend line going back to February 23.  However, the price is now below that moving average level and trend line which are both at 108.625. The current price is trading at 108.44.  Stay below the 108.65 level keeps the sellers in control.  ON the downside, the 38.2% retracement of the last trend move higher from the March 2 low comes in at 108.245. A move below would have traders looking toward the 200 hour moving average near 107.94.
  • USDCAD: The USDCAD broke outside its 10 day up and down trading range that spent the most time between 1.25865 and 1.26976. The price is trading now at 1.2524 after running lower over the last 6 trading hours of the day.  The Next major target is the low from February 25 at 1.24673. 
  • USDCHF: The USDCHF is trading near session lows of 0.9234. The move lower toyed with the 200 hour moving average for the 1st part of the NY session, but has pushed a little further away in the NY afternoon. The 200 hour moving average currently comes in at 0.92552.  In the new trading day, staying below that MA keeps the bias more in the favor of the sellers.  
  • AUDUSD: The AUDUSD based against its 200 hour moving average today at 0.77371 earlier in the NY session. The holding of the level, gave buyers the go ahead to move to the upside.  The pair is trading at a new session high at 0.7793. The 0.7800 natural resistance level and the 50% retracement of the range since the February 25 high at 0.7814 are the next upside targets in the new trading day.  

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