February 14th Morning Brief – 6 Things to Watch Today
Dave Green • 2 min read
Let's begin our day by taking a look at more potential trading opportunities prevailing in the market. Today on 14th of February, the U.S Dollar index trades slightly lower at $100.94, down -0.06 and -0.06% in the early Asian trading session. Earlier, the index maintained a bullish momentum for three consecutive trading days in the wake of a comment by the U.S. President, Donald Trump, on Thursday. He stated that he would declare the phenomenal tax reform plan in the next few weeks. Today, the investors awaited testimony from the Federal Reserve Chair, Janet Yellen, to look for any clues on the next rate hike.
In my opinion, the tax cuts will encourage the FED to keep the policy accommodative, weakening the U.S Dollar.
Here are 6 things to watch today:
- EUR: Flash GDP q/q
- EUR: German ZEW Economic Sentiment
- GBP: CPI y/y
- USD: PPI m/m
- USD: Core PPI m/m
- USD: Fed Chair Yellen Speaks
Recalling the EUR/USD trades recommended in the 13th of February Morning Brief, it hits exactly as recommended. At the moment, the EUR/USD is consolidating at $1.0602, slightly up +0.0003, and +0.03%. Finally, after a couple of days, the Euro gained support on the European Commission as they boosted its growth forecasts for the Eurozone over the next two years. However, it also showed their concerns over the uncertainty about the U.S policies, Brexit, and the elections coming up in Germany and France.
The technical side of the EUR/USD suggests a support at the 1.05946 area, along with the resistance at 1.06145. However, the pair is still trading below 50 periods EMA and the RSI is holding below 50, representing that this bullish movement can be a retracement rather than reversal.
From a trading point of view, I would recommend investors to have their buying positions above $1.05975, having placed their stops below at $1.05935 with a take profit of $1.06275.
The Canadian Dollar, a commodity currency, is underpinned by fuel oil prices. USD/CAD is maintaining a bearish momentum for the 5th consecutive trading day and has fallen more than 140 pips over the period.
It's interesting to know that Canada is one of the top oil producers and most of their revenue comes from the export of crude oil.
At the movement, the pair is trading at 1.3056, down -0.0016 points and -0.12%. However, the chart is demonstrating a strong bearish trend since the RSI and EMA's, both which are pushing it deeper. We can also observe a significant resistance around $1.3065 while having a support at $1.30265.
Looking at the technicals, the selling price below $1.3065 seems to be a good idea with a stop loss above $1.3105 and an initial takes profit at $1.3037 and then $1.3010.
In my concluding remarks, I would ask you guys to stay cautious as later today, we have a speech from the U.S Fed Chairwoman, Janet Yellen, and we can be sure we'll face unpredictable volatility in the market.