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US CPI and ECB Meeting Places Euro Volatility in Focus

FOREX
  • The questionable tradability of the Japanese Yen at current levels could place EURUSD in the spotlight over today’s US CPI release. Given overnight options pricing incorporates Thursday’s ECB meeting, favourable risk reward dynamics may be in place for some Euro crosses at this juncture.
  • On the potential impact on broader risk sentiment, and the notable buoyancy for major equity benchmarks, potential further downside targets for EURAUD and EURNZD are highlighted in the pdf below. The additional event risk of the Bank of Canada should also keep EURCAD a key short-term cross.
  • Full piece here:
  • FX Market Analysis - EUR 10-04.pdf

  • EURNZD: The RBNZ left rates on hold overnight as expected, but a requirement for anchored inflation expectations added a hawkish tilt to the policy statement. This translated into modest NZD outperformance and sees EURNZD trade lower. This moderately extends the move below the 20-day exponential moving average. The 50-day EMA has yet to be breached and further weakness below this average (intersecting at 1.7851), could add to bearish momentum. Downside continuation would place the focus on trendline support, which resides around the 175.00 mark.

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  • The questionable tradability of the Japanese Yen at current levels could place EURUSD in the spotlight over today’s US CPI release. Given overnight options pricing incorporates Thursday’s ECB meeting, favourable risk reward dynamics may be in place for some Euro crosses at this juncture.
  • On the potential impact on broader risk sentiment, and the notable buoyancy for major equity benchmarks, potential further downside targets for EURAUD and EURNZD are highlighted in the pdf below. The additional event risk of the Bank of Canada should also keep EURCAD a key short-term cross.
  • Full piece here:
  • FX Market Analysis - EUR 10-04.pdf

  • EURNZD: The RBNZ left rates on hold overnight as expected, but a requirement for anchored inflation expectations added a hawkish tilt to the policy statement. This translated into modest NZD outperformance and sees EURNZD trade lower. This moderately extends the move below the 20-day exponential moving average. The 50-day EMA has yet to be breached and further weakness below this average (intersecting at 1.7851), could add to bearish momentum. Downside continuation would place the focus on trendline support, which resides around the 175.00 mark.