Strong US data & neutral ECB bolsters USD rally

Strong US data & neutral ECB bolsters USD rally

Today’s focus turns to the YEN, GBP & US GDP

The Euro fell to its lowest since mid-January at 1.2094 after ECB President Mario Draghi hailed “solid” eurozone growth but kept rates unchanged, and the USD rallied on strong U.S. economic data.

The EURUSD had initially rebounded after Draghi played down concern over recent softness in data but fell as the market digested the news and the USD Index continued its eight-day rally, rising to 91.64, its highest since Jan. 12 after strong US Durable Goods data was released.

Strong US data

The majors are moving in line with the USD but not as dramatic as the move on the EURUSD.

We have a solid day of trading ahead with loads of key data scheduled across all trading sessions. I expect the current trend (USD strength) to remain intact, barring any Trump intervention or an outrageously weak US GDP result.

Check our Next Best Trades Watchlist for full details as to which specific pairs we are focusing on.

Asian Session

We have a bunch of Japanese data scheduled today as well as the BOJ Policy Meeting. Now I don’t expect any changes from the BOJ but it’s always wise to plan for a random outcome.

So the major focus (initially) will be on the Japanese data, there’s loads of it: CPI, Employment, Retail Sales & Industrial output.

If all the numbers line up and have reasonable variance then we could see a significant move in the Nikkei, and that’s our entry window!

The Nikkei is due to open +120, so that’s our benchmark to watch.

The AUD & NZD should tow the line and continue to head south although with so much Japanese activity today USDJPY & the JPY Crosses are the way to go!

European Session

We literally have a smorgasbord of European data releases today. Of course, GBP and EUR will be the major focus and both have key data coming out.

The current trend is down so that’s where the potential longer-term trades are. If we get data against the run of the current momentum, then we may have short-term trades, but that’s it.

UK GDP & the Eurozone sentiment data will be of particular focus for traders.

Also, keep an eye on the Spanish data which comes out early Europe. This data has been slowly getting worse & at some point, it will impact.

North American Session

It’ll be on for young and old again today with the high impacting US GDP data scheduled. There’s a bunch of low impacting data but one to also watch is the University of Michigan Sentiment Final numbers.

The US 10YT is back under 3% so that’s still worth keeping an eye on. If they start to roll over then we may see some profit taking on this recent USD rally ahead of the weekend.

Otherwise, if we get strong US GDP data then I’d say the current moves will continue.

Technical Set Up – What’s Happening with the Majors

The major currency pairs are still correlating perfectly. Just remember, the Trend is your Friend!

Strong US data

Today’s Fundamental Drivers

There’s so much data scheduled today I had to filter the results only for “extremely high impacting” to fit them all in the image.

Strong US data

Plan the Trade, Trade the Plan!

The idea of our “Market Insight” is to give you some guidance with your daily preparation.

Your Daily Analysis needs to become habitual – For full guidance on our daily routine click here.

Make sure you don’t waste unnecessary time in front of the screens.

Remember you need to be fresh, confident and ready to trade and by sitting aimlessly in front of your screens you will become stale and uncertain.

The key to your success: Isolate the opportunities that work for you and focus on them.

Don’t worry about things that you can’t make…..chasing them will only cause problems (tiredness & irrational behavior will take over).

Tune up your charts & get ready to trade…..see you in the 247 Trade Zone!


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