Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

EUR/USD Can’t Find Momentum, SNB Up On Thursday

By Saxo BankForexMar 11, 2013 07:35AM ET
www.investing.com/analysis/eur-usd-can%E2%80%99t-find-momentum,-snb-up-on-thursday-158501
EUR/USD Can’t Find Momentum, SNB Up On Thursday
By Saxo Bank   |  Mar 11, 2013 07:35AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
We saw a bearish reversal in EUR/USD on Friday, but we’ve also got very little momentum as this is the seventh day in a row for the pair in the 1.3000 area. The EUR/CHF might be on the move after the SNB meeting on Thursday.

The Fitch downgrade of Italy’s credit rating late Friday had the market jumping about a little. The Euro managed to largely shrug this off, but we do see German bunds having taken back all the territory lost on the strong US payrolls report. Italian 10-year yields, meanwhile, are all of about 5 bps higher in this morning’s trade. Over the weekend, Beppe Grillo stated that he wanted his party to win a new election, and ruled out the idea of forming a government with any other party.

Interesting recent poll results suggest that the vast majority of Italians are against the reintroduction of the lira and want to remain in the EU. This suggests that as long as a bit of money printing/austerity relief is thrown Italy’s way, systemic risks can be kept at bay for awhile – but if the core doesn’t give in on this front, we can expect a deepening of anti-EU feeling in Italy and the periphery

Chart: EUR/USD
A bearish reversal on Friday for the EUR/USD, but these reversals at the bottom of a range are tricky creatures, so let’s see if we head lower right away here or risk a rally of consolidation in the nearest term first. There’s no momentum at the moment, as this is the seventh trading day in the 1.3000 area. If we trade back above 1.3075 or so, the risk rise of a break above 1.3135/1.3150 and perhaps test of the 1.3250/1.3300 area. The bearish might wait for 1.2950 for confirmation that fresh downside is in the cards now rather than later.

<span class=
EUR/USD" title="EUR/USD" width="455" height="301" />
Looking ahead at this week.
We have the BoJ minutes out in Tuesday’s Asian session – it will be interesting to look for the degree of dissent on the BoJ’s future plans, although market-place consensus is that the new leadership will get its way. There are some important points to bear in mind, most broadly that this move may be entirely conditional on a complacent outlook for risk. Overnight, new governor nominee Kuroda made noises about using derivatives as a possible instrument for the BoJ to transmit policy. I’m not sure I understand the power of taking this approach versus the standard bond-buying, but it is now “out there”. I’m still interested in whether we get a chunky consolidation in this JPY move either here, just before or just after the end of the Japanese financial year. In all of the last four years, the JPY saw major pivots in the March-May time frame.

USDSEK posted an interesting reversal on Friday as SEK appears to be over-performing a bit. Riksbank Governor Ingves will be out speaking late this evening. Sweden’s data has been surprising very positively lately, but those surprises nearly always tend to mean revert. EURSEK is within striking distance of those 12-year lows around 8.18.

Norges Bank is out this week on Thursday. Norway’s economic surprises have been extremely negative while those of Sweden have been positive. This and the 10-dollar/bbl sell-off in crude oil have NOKSEK near the range lows of the last many years. This is an interesting pair for those looking for mean reversion.

In other central bank news this week, we have the SNB out on Thursday. It is very interesting to see the bounce-back in EUR/CHF after the Italian elections and I’m interested to see if this meeting opens the gates for a rally that takes the pair to new highs eventually. There is a non-trivial risk that the bank points to a change of policy on the floor this week.

We also have the RBNZ out on Wednesday. It provides the odd combination of strong data surprises, but worry over forward weakness from a drought affecting northern areas of the country, threatening one of the “Saudi Arabia of milk’s” key exports. This meeting will be key for estabilishing whether the recent move higher in the AUD/NZD and amove lower in the NZD/USD will extend from here. While 2-year NZD swaps are up near 12-month highs in the 3.00% range, it is hard to imagine the RBNZ expressing too-hawkish rhetoric due to the kiwi’s notable strength this year.

The highlight of the US data calendar this week is the Retail Sales release for February out on Wednesday as we see how pay reductions from the expiry of the payroll tax cut have hit spending. PPI and CPI data for February are up Thursday and Friday, respectively.

Stay careful out there.

Economic Data Highlights
  • China February CPI out at +3.2% YoY vs. +3.0% expected and +2.0% in January.
  • China February . PPI out at -1.6% YoY vs. -1.5% expected and vs. -1.6% in January.
  • China February Industrial Production out at +9.9% YoY vs. +10.6% expected and +10.0% in January.
  • China February Retail Sales out at +12.3% YoY vs. +15.0% expected and +14.3% in January.
  • China February New Yuan Loans out at 620B vs. 700B expected and 1070B in January.
  • Germany January. Trade Balance out at +13.7B vs. +13.9B expected and vs. +12.1B in December.
  • France January Industrial Production out at -1.2% MoM and -3.5% YoY vs. -0.2%/-2.7% expected, respectively and vs. -1.9% YoY in December.
  • France January Manufacturing Production out at -1.4% MoM and -4.5% YoY vs. -0.2%/-3.3% expected, respectively and vs. -3.1% YoY in December.
  • Switzerland January Retail Sales out at +1.9% YoY vs. +4.7% in December.
Upcoming Economic Calendar Highlights
  • Sweden Riksbank governore Ingves to speak (2300)
  • Japan February Corporate Goods Price Index (2350)
  • Japan BoJ Minutes (2350)
  • UK February RICS House Price Balance (0001)
  • Australia February NAB Business Conditions/Confidence (0030)
  • Japan February Consumer Confidence (0500)
EUR/USD Can’t Find Momentum, SNB Up On Thursday
 

Related Articles

Blake Morrow
Chart Of The Day: USD/ZAR By Blake Morrow - Jun 22, 2021

USD/ZAR has spent the last few days probing key resistance, which are the lows from February at the 14.4100 level. Above that the 50% retracement of the March highs to June lows...

Al Brooks
EUR/USD Still In 11-Month Trading Range By Al Brooks - Jun 22, 2021 3

– After 3 big bear bars and with the EURUSD still in an 11-month trading range, yesterday was not likely to be a big bear day. Instead, it was a big bull day. – Yesterday’s high...

EUR/USD Can’t Find Momentum, SNB Up On Thursday

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email