Following big falls in some risk-sensitive assets on the back of North Korea tensions, a number of global stock indices and dollar currency pairs ended the session with impressive reversal-looking technical patterns as the dip buyers evidently stepped in to take advantage of the lower prices (see the technical outlook section below).
The economic calendar is taking a breather today but will return with bang tomorrow. Market participants are looking forward to two major central meetings as the Bank of Japan and especially the European Central Bank take centre stage.
The EUR/USD pair went sideways initially on Friday, and then had a very volatile session as the jobs number in America came out much longer than anticipated.
The EURUSD pair initially tried to rally during the session on Wednesday, but then fell significantly towards the 1.13 level below.
While it may be a quiet day for macroeconomic data, it hasn’t been the case for the markets. Stocks fell sharply at the London open, before paring back their losses sharply, while gold has managed to hold onto its gains after its suspicious-looking drop on Monday.
The EURUSD pair had a very volatile session on Wednesday, as we are trying to front run the European Union quantitative easing situation.
Thanks to soft US economic data of late, expectations about an aggressive rate hiking cycle by the Fed has diminished.
It is going to be a big week for the markets this one, especially towards the end of it. Among other things, we will have the UK’s general elections, the ECB’s latest policy decision and former FBI Director James Comey’s testimony all to look forward to on Thursday.
A classic reaction in the markets to the outcome of the French elections. It was widely expected that pro-euro centrist Emmanuel Macron was going to become the new President of France and that he would beat the euro-sceptic Marine Le Pen by a wide margin. And so it proved.
The euro finds itself higher across the board. The EUR/USD has risen above the 1.0800 handle again, the EUR/GBP to 0.8650 and the EUR/JPY was back at 120.00 at the time of writing.
