Morning Preview: ECB Conference Brings the Big Guns
Rowan Crosby • 1 min read
Markets have made a slow start to the week, although equities did manage to rally and break a two-day slide. It seems that no matter how overbought the S&P 500 gets, markets aren’t ready to halt the melt up just yet.
Most of the major forex pairs also made a quiet start to trading on Monday. The GBP was the weakest in early trade however it managed to claw its way back late. The AUD and NZD both began what looks like a breakout to the downside. They have been weak for a number of months now and this looks like more of the same.
Yesterday I wrote extensively about both the AUD and the NZD and to summarize my thoughts quickly – stay short.
Markets have a big week ahead as we have the ECB conference that features the Fed’s Janet Yellen, the ECB's Mario Draghi, Bank of England boss Mark Carney and Bank of Japan Governor Haruhiko Kuroda. We are also awaiting multiple inflation readings from the US, UK, Canada and the Eurozone.
US Dollar Index (DXY) – 240 min Chart.
The US Dollar is still trading at the lower levels of what I expect. 94.50 to me is the major support level, so I would be happy buying versus the majors at this point. However, with the big data ahead, it might be wise to take a cautious approach today.
Top Economic Data for Tuesday
EUR – German GDP & ZEW Economic Sentiment
GBP – UK CPI
USD – PPI
JPY – GDP