Short
recap
After FOMC and NFPs – markets should be
focusing on steps with longer term impact like Fed hiking, roll-back of Dodd-Frank
regulation, intrustructure, Obamacare and tax reform than short-term vows over
immigration ban
EURUSD – 1.0800/50 still in place and the same goes for DXY at 99.00/50
From technical perspective unless both levels
are broken, market is looking at USD from positive side (technically) despite
still broad negative outlook
Further resistance around 1.0821/75 area with
200 DMA (may be eventually tested)
USDJPY – below important 112.00/50
AUDUSD – 0.7830 is critical
The bullish USD view to be reviewed if all of
the above mentioned levels are broken.
EURUSD – may be verbally supported by the criticism for example from
Schauble, who is not happy with weak EUR as it is negative for productivity
even though Germany enjoys huge surpluses. His verbal comments are not to last
long as he also knows that monetary policy is set for the whole EZ and not just
Germany.
This fact, especially in the light of
situation in Italy, may not be fully priced in by the market as the still
rising divergence in inflation and economic growth among EZ countries is not
either. Just by looking at widening of peripheral spreads warrants that ECB
will not change its policy anytime soon. There is also another risk coming from
regulation of sovereign bond holdings limits for the banks, what may in turn
trigger the sell off in Italian bonds. If that happens, the ECB would need to
step in. One shouldn’t be surprised if EURUSD rate depends on BTP-Bund spread
and moves in tandem. Actually, that would be more accurate valuation metric
along with political risks in EZ that trading EUR based on German economy.
Williams (Fed) was out after NFPs on Friday
confirming that March meeting is a live meeting, thus opening the door for
markets to learn more from Fischer as well as Yellen’s testimony on Wednesday
next week.
Good luck Champs!
Mr Hawk
DISCLAIMER: This material was created for informational
purposes only and represents the Land of Trading team’s view of the past and
current economic and capital market environment. It is not an investment advice
and should not be viewed that way at all, and the creators of this material
cannot be held liable for any potential losses resulting from trading, where
despite this disclaimer someone would consider this material as an investment
advice. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom
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