The behavior of the major currencies overnight was very calm and passed in the atmosphere of waiting for key decisions (ECB, NFP, Trump). EUR/USD is at 1.24, GBP/USD is quoted at 1.39, USD/JPY is fighting to stay above 106.00. The change in the percentage of the exchange rate of any of the three currency pairs does not exceed 0.1% at the moment. The contract for the SP500 slowed by 2730 points around resistance. Profitability of the American 10-year Bonds is close to 2.9%. In Shanghai and Tokyo, the buyers are slightly dominant as bother Nikkei 225 and Shanghai Composite go up about 0.5%.
On Thursday 8th of March, the event calendar is busy in important news releases, so the global investors should keep an eye on German Factory Orders data, ECB Intrest Rate Decision and Press Conference, Canadain New Housing Price Index, Building Permits and Housing Starts data and Unemployment Claims and Continuing Claims data from the US. Moreover, there are some speeches scheduled form the central bankers from Canada: BOC Deputy Governor Timothy Lane and BOC Governor Stephen Poloz.
EUR/USD analysis for 08/03/2018:
The event of the day is the meeting of the European Central Bank, which will announce its decision at 02:45 pm GMT. The market participants do not expect changes in the parameters of the monetary policy. At 03:30 pm GMT a press conference of ECB President Mario Draghi is planned and it is the one that arouses the most emotions. Investors will focus on removing the dovish attitude from the statement in relation to the asset purchase program. Nevertheless, the Governing Council might postpone this step in time. Although the strength of economic growth may be impressive, the persistence of inflation rebound is still debatable. In addition, the monetary authorities do not want to unnecessarily fuel the appreciation of the euro. As a result, the ECB meeting may not give the impulse for a faster strengthening of the single currency. The removal of the said fragment would have a hawkish tone, as it would allow for a serious debate on the date of the first interest rate increase (conventionally taken 6 months after the end of QE).
Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market is still hovering around the level of 61% Fibo with a local high made at the level of 1.2446. The market conditions are overbought and the momentum indicators are still above its fifty level but point down ahead of ECB interest rate decision. The nearest technical support is seen at the level of 1.2366, but the key support remains at the level of 1.2165.
