official Market Update by Solidecn.com

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EURUSD ticks lower after Kazimir remarks

Peter Kazimir, member of the European Central Bank governing council, said that the ECB is closely monitoring the situation in the banking sector and that it is ready to step in to ensure price and financial stability in the euro area. However, his remarks relating to the monetary policy show that ECB is somewhat concerned by the uncertainty caused by recent banking failures in the US and Europe - Kazimir revealed that ECB members agreed not to provide guidance for the May meeting. On the other hand, Kazimir said in the very same speech that he thinks that inflation is too high for too long and that further rate hikes are needed, although possibly at a slower pace, which is a kind of guidance on its own. Speaking about future decisions he said that core inflation developments and trends will be key in determining the next move.

EUR ticked lower during Kazimir's speech but the move was very small and has been completely erased by now. The pair is trying to recover from an overnight drop that was launched after repeated failures to break above the 1.0850 swing area.

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Ripple

Cryptocurrencies are rebounding today despite the still-uncertain news about the conflict between the CFTC and the Binance exchange. Among all the projects, Ripple (XRP) stands out again. Fintech company Ripple will hold a closed-door consultation with the Securities and Exchange Commission (SEC) on March 30. The market took the news of the warring parties meeting in court as a signal of a potential settlement. Bringing it about would be a victory for the entire decentralized finance sector in the States. It would undermine the SEC's decision-making role and reduce the fear of the prospect of restrictions proposed by Gary Gensler. 

 

• Ripple is cited by many analysts as one of the future foundations of a digital financial infrastructure based on blockchain technology. For example, recently Ripple's blockchain was able to process a $755 million transaction, in 4 seconds, for a fee of tenths of a dollar (0.01 XRP). By the crypto market, the company is seen as a major competitor to the interbank market, which charges high commissions for processing international transfers;
• Iron Key Capital analysts point to Ripple as a winner in the multi-billion dollar global payments market. In addition to Ripple itself, cryptocurrencies Stellar and Algorand are also gaining today. Both of them, along with Ripple, have been pointed out as being integrated into the new ISO20022 international settlement standard. This system will replace the SWIFT standard in the coming years. Ripple's victory with the SEC is expected by Ark Invest fund manager CathieWood, among others;
• The next few weeks may bring a 'rally under the event' in the price of Ripple tokens. A similar course of events is characteristic of the crypto market at the same time as it often ends in a sell-off (profit realization, so-called 'fact selling', as the decisive moment is very close. This was the case, among others, with the price of Cardano, which implemented smart contract technology in September 2021, and Ethereum Merge, in the summer of 2022.

 

 

The largest holders of Ripple so called 'whales' have increased their buying activity in view of the upcoming SEC decision.

 

 

Ripple chart, D1 interval. The price has overcome the key resistance near $0.55, set by previous price reactions. The chart, which resembles a technical saucer formation, may indicate a more permanent reversal of the downward trend. 

 

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OIL

• Can oil prices fall further? What does it mean for inflation?

Brent price dropped around 9% since the beginning of 2023 but price decline over the past 12 months is already exceeding 30%. Taking a look at the whole post-pandemic recovery move, crude prices currently trade near a midpoint. While it looked like undersupply and increasing demand could be a problem, those concerns turned out to be unnecessary. A strong bearish trend can be observed on the oil market since June 2022 and the latest issues in the banking sector may have resembled the 2007-2009 financial crisis when crude prices quickly plunged from $150 to less than $40 per barrel. Could history repeat itself? Will cheap oil turn out to be a remedy for a number of current issues? Are we set for further price drops in the later part of the year or will oil recover?

 

• Is oil cheap already?

Brent and WTI are currently trading in a $70-80 per barrel range. Taking a look at the 5-year moving average, oil seems to be priced in-line but a look at the 1-year moving average shows that it is trading around 2 standard deviations below mean, which may hint at oil being oversold in the short-term. On the other hand, looking at a longer horizon, there is still some room for prices to fall. Bloomberg points out that the current price is still too high given the relatively high probability of US recession. According to the news agency, there is a high chance of barrel price dropping below $50 should a recession indeed arrive in the United States.

Oil looks to be oversold in the short-term but longer-term measures hint that it is priced in-line. 

Taking a look at seasonal patterns, oil seems to be significantly oversold, especially when we take a look at 5-year and long-term patterns. On the other hand, taking a look at the worst year in terms of performance in the past 5 years or even longer, oil still has some room to fall, especially in the first 4 months of the year (January-April period). It is often the case that when the first third of the year is bad for prices, the second third is usually significantly better (May-August).

Seasonality for the oil market. Oil is having a bad start to the year but it does not mean that the worst is already behind. 

 

• Will cheap oil be a remedy for current global issues?

Spare for the Ukraine war and ongoing banking crisis, cheaper oil could actually be a remedy for a number of global issues. A further drop in oil prices would accelerate a drop in inflation, which not only would limit future rate hikes, but may also bring forward rate cuts. US producer's inflation reacted quickly and steeply to a year-over-year decline on the oil market. Lower oil prices may help avoid some of the economic issues but at the same time they may be driven by a potential economic crisis that is currently unfolding.

Change in oil prices suggests that PPI inflation may continue to drop to as low as 0% YoY!

Is there a chance for further price declines?

Oil has recovered a bulk of the losses triggered by the recent banking crisis. Nevertheless, a look at fundamentals suggests that price declines may resume and continue. Supply did not drop as much as feared as Russia managed to find markets for its oil. China continues to use its own stockpiles and does not increase imports. This may also lead to a further build-up in US oil inventories. Comparative inventories (nominal change in inventory level over 1 year) could be an important indicator here. It is currently pointing to possibility of further price declines and "strongly oversold" signal will not surface until inventories climb to 80-100 million barrels above year ago levels. Unless an economic crisis arrives, there is a chance for price recovery in the second half of the year - oil drilling rigs data suggests that US production is nearing peak output and inventories in China will run out at some point.

Comparative inventories suggest that oil prices may continue to drop. Contrarian signal would surface once inventories climb to 80-100 million barrels above year ago levels.

Oil recovered noticeably but continues to trade in a downtrend. A break above 50- and 100-session moving average, and a break above the upper limit of Overbalance structure later on, would brighten the outlook for oil bulls. However, the outlook for oil remains bearish for now.
 

[Solid ECN ✔️]

US100 gains over 1%

China's tech sector rebound fuels gains on Nasdaq 

US100 futures are gaining, as a higher opening in Asia and euphoria on Alibaba shares have improved sentiment around the technology sector. Analysts have been very wary of Chinese tech stocks in recent years, fearing direct government intervention in their business and margins. So far, however, China is positioning itself as a free-market economy, allowing it to compete with the United States. A few months ago, representatives of Chinese authorities at the Davos Economic Forum asserted that, contrary to Western fears, the country does not intend to centralize power and completely subordinate the financial market party. In addition, reports from the Washington Post indicated that President Joe Biden is expected to present new banking regulations. The White House was prompted to create them by the SVB bankruptcy. The Nasdaq is attempting to close the quarter with its best performance since 2020, and after several weeks of turmoil in the banking sector, investors appear 'jaded' by news of the prospect of a crisis. US bank valuations are still far from a meaningful upward correction and Joe Biden has warned that the banking crisis is far from over, against which buyers have shifted from the 'risky' financial sector to the technology market.

Another supportive factor for US equities is the sharply losing VIX index, which is seen by investors as a barometer of market fear. Compiled by the CBOE, the index extends a 1.5-week-long downward impulse. 

The US100 index is trying to maintain the bullish momentum initiated 2 weeks ago, and the declining VIX may support the buyers' side even now. However, it is worth watching tomorrow and Friday's session, when we will know many interesting macro readings from the US economy.
 

[Solid ECN ✔️]

US100

• US indices finished yesterday's trading higher with all major Wall Street indices adding 1% or more. S&P 500 gained 1.42%, Dow Jones moved 1.00% higher and Nasdaq jumped 1.79%. Russell 2000 gained 1.08%
• Nasdaq gained over 20% off December low and has entered a technical bull market.
• Indices from Asia-Pacific trade mostly higher. S&P/ASX 200 gained 1%, Kospi added 0.6%, Nift 50 moved 0.8% higher while Nikkei dropped 0.6%
• Indices from China traded 0.2-0.5% higher
• DAX futures point to a higher opening of the European cash session today
• Fed Chair Powell has reportedly told Republican Representatives that Fed expects 1 more rate hike in 2023
• ECB Schnabel said that banking troubles may have a disinflationary effect. On the other hand, she warned that labour costs indicate possibility of second round inflationary effects
• Fitch noted that there were 14 sovereign default events since 2020, compared to 19 sovereign default events in whole 2000-2019 period
• Chinese premier Li Qiang said that his country will strengthen macro policy adjustments and act to boost consumption and investments
• UK car production increased 13.1% YoY in February as supply chain pressures eased. This was the first monthly increase in output in three months. 81% of all cars produced in UK were exported, with EU being main destination
• New Zealand's building permits slumped 9% MoM in February. On annual basis drop reached 29.2% YoY
• Major cryptocurrencies trade mixed - Bitcoin gains 1.2%, Ethereum adds 0.1%, Dogecoin drops 0.7% and Ripple trades 3.6% lower
• Energy commodities trade mixed - oil gains around 0.3% while US natural gas prices drop 1.7%
• Precious metals trade mostly higher - silver adds 0.7%, platinum trades 0.8% higher and palladium gains 0.6%. Gold trades flat
• AUD and JPY are the best performing major currencies while USD and EUR lag the most

Nasdaq-100 (US100) trades around 20% above the December 2022 low and therefore has entered a bull market, at least from a technical point of view. However, for any larger upward move to be delivered, a break above a psychological, mid-term resistance zone in the 13,000 pts area would be required.
 

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EURUSD

EURUSD will be on watch throughout the day today. This is thanks to releases of inflation data from Europe. Flash CPI reading for March from Spain was already released at 8:00 am BST and it came in even below low expectations - 3.3% YoY vs 3.8% YoY expected (6.0% YoY previously). Such a drop can be attributed to base effects, especially in energy, as oil prices skyrocketed a year ago in the aftermath of Russian invasion of Ukraine and now they are over 30% year-over-year lower. German reading at 1:00 pm BST is also expected to show a noticeable drop - from 8.7% YoY to 7.3% YoY.

 

 

Market expectations for ECB rate hikes have dropped and now the market prices in an around-75% chance of a 25 basis point rate hike at a meeting on May 4, 2023. However, a softer CPI readings from Europe may push those expectations even lower and it could serve as a drag for EUR. Nevertheless, it should be noted that CPI data for April will be available when ECB next meets therefore today's reading may have less of an importance for rate setters in Europe at their next meeting.

 

Taking a look at EURUSD chart at H1 interval, we can see that the pair dropped following Spanish CPI release (orange circle) but has managed to recover all of the losses later on. Pair broke above the 1.0850 resistance zone and is now attempting to take out yesterday's daily highs in the 1.0865 area.

 

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AUDJPY

• US indices finished another trading day higher. S&P 500 gained 0.57%, Dow Jones moved 0.43% higher and Nasdaq jumped 0.73%. Russell 2000 was a laggard and dropped 0.18%
• Indices from Asia-Pacific followed into footsteps of US peers and traded higher. Nikkei and S&P/ASX 200 gained around 0.8% each, Kospi added 0.9% and Nifty 50 traded 1.0%. Indices from China traded up to 0.8% higher
• DAX futures point to a slightly higher opening of the European cash session today
• Reuters reports that Japan will set up a panel to discuss possibility of implementing digital yen backed by Bank of Japan
• Turkey has approved Finland's NATO membership bid, clearing the final hurdle for the Nordic country to join the alliance. Sweden is still waiting for approval from Turkey and Hungary
• According to Reuters report, OPEC+ JMMC is most likely to recommend leaving output cuts unchanged at a meeting on Monday
• The Japanese trade and industry ministry announced that it will impose export controls on semiconductor manufacturing equipment. While it was stated that restrictions do not target any specific country, most take it as a step against China
• Official Chinese manufacturing PMI dropped from 52.6 to 51.9 pts in March (exp. 51.6). Services gauge jumped from 56.3 to 58.2 pts (exp. 55.0)
• Japanese industrial production increased 4.5% MoM in February (exp. 2.7% MoM)
• Japanese retail sales increased 1.4% MoM in February (exp. -0.3% MoM)
• Australian private sector credit increased 0.3% MoM in February (exp. 0.4% MoM)
• Major cryptocurrencies are trading higher - Bitcoin gains 0.3%, Ethereum and Dogecoin add 0.6% each and Ripple trades 1.4% higher
• Energy commodities are trading little changed - oil drops around 0.1% while US natural gas prices climb 0.2%
• Precious metals trade mixed - gold and silver drop while platinum gains slightly
• NZD and AUD are the best performing major currencies while JPY and CHF lag the most

 

AUDJPY is trading higher following better than expected readings of official Chinese PMIs for March. A key near-term resistance to watch can be found in the 90.25 area, where the downward trendline and 50-session moving average (green line) can be found.

 

[Solid ECN ✔️]

DE30

German retail sales data for February was released today at 7:00 am BST. Report was expected to show a 0.5% MoM increase as well as 5.1% YoY drop in retail sales. However, actual data turned out to be much worse than expected with monthly data showing a 1.3% drop and annual data showing 7.0% YoY plunge. DE30 ticked lower following the release while EURUSD saw a minor uptick.

 

 

DE30 dipped after miss in German retail sales.

 

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EURUSD climbs back above 1.09 mark after French CPI beat

French flash CPI data for March was released today at 7:45 am BST. Report, just like reports from other European countries, was expected to show a significant deceleration in year-over-year reading. However, actual data showed a smaller than expected slowdown, just as it was the case with German data yesterday. French CPI slowed from 6.3 to 5.6% YoY in March, while the market expected a slowdown to 5.5% YoY. On a monthly basis, CPI reached 0.8% MoM, above 0.6% MoM expected by the market but below 1.0% MoM print from January.

 

 

Market reaction was small - DE30 ticked lower in a knee-jerk move before recovering losses while EURUSD moved higher and climbed back above 1.09 mark.

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Gold

Precious metals are trading a touch lower on the day after erasing earlier gains. Higher-than-expected reading of the French CPI this morning has taken some steam off the precious metals. Gold, as well as silver and platinum, may experience higher volatility following the release of European CPI reading for March (10:00 am BST) and US PCE reading for February (1:30 pm BST). 

 

 

Taking a look at GOLD at the H1 interval, we can see that bulls attempted to push precious metal's price above the $1,985 resistance zone this morning. However, the attempt turned out to be a failed one and gold started to pull back. Should the ongoing pullback deepen, the first support to watch can be found in the $1,970 area, marked with previous price reactions as well as 50- and 200-hour moving averages. Overall, gold is trading sideways in a triangle pattern and direction of the next big move may be determined by direction of the breakout from this pattern.

 

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US100

It seems that we may be ending the downward phase on Wall Street, given the more than 20% rebound from the bottom. The US100 is having its best quarter since Q2 2020! In fact, if it weren't for the high inflation problem in February and then the banking crisis in March, then the US100 could even be above 14,000 points. Currently, the goal of investors will be to break through the area of 13450 points, where the range of the previous similar correction is located, and 13700 points, which are the peaks of the previous correction as well.

 

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Oil

• Output cut came as a surprise as media reports prior to the weekend hinted that OPEC+ JMMC will likely recommend to keep output unchanged at a meeting today
• Indices from Asia-Pacific traded mixed today - Nikkei and S&P/ASX 200 gained 0.5% each while Kospi dropped 0.2% and Nifty 50 traded 0.1% lower. Indices from China traded up to 1.2% higher
• European and US index futures trade slightly below Friday's cash closing prices
• Goldman Sachs updated oil price forecasts following a surprise OPEC output cut. The Bank now expects Brent price of $95 per barrel in December 2023 ($90 prior) and $100 per barrel in December 2024 ($97 prior)
• ECB De Guindos said that while headline CPI in euro area is likely to fall this year, core inflation will likely stay firm. ECB members said that European banking sector is robust and that there is ample liquidity in the sector
• Fed's Waller said that recent data shows that inflation can be brought down with causing damage to the labor market
• Chinese Caixin manufacturing PMI dropped from 51.6 to 50.0 in March (exp. 51.7)
• Australian building permits increased 4.0% MoM in February (exp. -2.6% MoM)
• Cryptocurrencies are trading lower. Bitcoin drops 1%, Ethereum trades 0.4% lower while Dogecoin and Ripple dip 1.8%
• Precious metals are pulling back amid USD strengthening - gold and platinum trade 0.9-1.0% lower while silver drops almost 2%
• USD and JPY are the best performing major currencies while NZD and EUR lag the most

 

A surprise output cut from OPEC triggered a spike on the oil market. WTI (OIL.WTI) launched a new week near the $81.20 resistance zone, marked with the upper limit of previous trading range as well as the upper limit of the Overbalance structure. However, bulls failed to break above it on the first attempt.

[Solid ECN ✔️]

EURUSD

Today we are going to analyze the EUR/USD for a longer period of time, in order to get a broader view of the major currency pair. Over the last few months the euro has been recovering against the US dollar, but recently the bullish momentum has slowed down. But could the current rally be compromised?

On the weekly chart, we can see that the price continues to be supported relatively well by the 50-period EMA, although it continues to struggle to break above the recent highs reached this year.

Dollar Index - Weekly Time Frame

On the other hand, when we look at the dollar index chart, we can see that there is room for further declines in the USD. Above all, when we identify the chart pattern - head and shoulders which could support further declines if the price breaks below the neckline of the pattern.
Furthermore, the improvement in market sentiment also supports this bearish  USD scenario.

AUD leads the gains this morning.

 

[Solid ECN ✔️]

Markets ignore European PMI revisions 

Revisions of European manufacturing PMI indices for March were released this morning. Spanish reading showed quite noticeable beat but releases from other countries, like France and Germany, were revisions and came in close to flash estimates. As a result, there was no major reaction to those on the market. EURUSD trades mostly flat on the day while European equity markets trade slightly higher on the day.

 

Manufacturing PMIs for March

• Spain: 51.3 vs 50.1 expected
• Italy: 51.1 vs 51.0 expected
• France (final): 47.3 vs 47.7 first release
• Germany (final): 44.7 vs 44.4 first release
• Eurozone (final): 47.3 vs 47.1 first release

While EURUSD has seen nearly no reaction to PMI releases, the pair saw some interesting moves earlier in the day and a pin bar pattern near an important price zone can be spotted on the daily chart.

[Solid ECN ✔️]

Oil

OPEC+ members announced massive voluntary oil output cuts over the weekend, triggering a spike in oil prices at the beginning of new week's trade. A total cut of 1.157 million barrels was announced by 8 OPEC and non-OPEC countries. Those cuts will take effect from May and will remain in force until the year of the year. On top of that, Russia announced that its 500 thousand barrel output cut, which was set to end by the end of June 2023, will be extended until the end of 2023. This is a massive reduction in supply, amounting to more than 1% of global output, and it should not come as a surprise that oil prices jumped over 5% at the beginning of a new week. However, it should be noted that such massive oil output cuts may also hint that OPEC has some serious concerns about demand outlook. Having said that, this may not be bullish for oil prices in the long-term. OPEC+ Joint Minister Monitoring Committee is meeting today and will provide recommendations on policy. It was widely expected that recommendation will be for no change in the output but weekend announcements created uncertainty.

OPEC: 1,079k bpd

• Saudi Arabia: 500k bpd
• Iraq: 211k bpd
• United Arab Emirates: 144k bpd
• Kuwait: 128k bpd
• Algeria: 48k bpd
• Oman: 40k bpd
• Gabon: 8k bpd

OPEC+: 578k bpd

• Kazakhstan: 78k bpd
• Russia: extension of 500k bpd cut until end of the year (was set to end in June)

Brent (OIL) launched this week's trading with a big bullish price gap but those gains started to be erased later on. Nevertheless, oil continues to trade around 5% higher on the day. A point to note, however, is that price did not manage to reach a key resistance zone in the $87 area, marked with previous price reactions and the upper limit of the Overbalance structure. This means that the outlook remains bearish and an attempt to fill the bullish price gap cannot be ruled out. The $80 area is the first support to watch in such a scenario.
 

[Solid ECN ✔️]

Gold

• OPEC+'s surprising decision to cut production has lifted oil prices. OIL.WTI quotations jumped above the $81 level.
• Germany's DAX tested Friday's highs, but ultimately closed the day 0.3% lower. In turn, we saw slight increases in France, where the CAC40 added 0.32%, or the UK, the FTSE100 gained 0.54%.
• Gold is doing quite well on Monday, with the precious metal's quotations rising less than 1% and approaching once again the $2,000 barrier, which should be seen as short-term resistance. 
• Treasury bonds are gaining on a wave of manufacturing ISM data, which eased concerns about lingering inflationary pressures in the U.S. and overshadowed the potential impact of OPEC+ oil production cuts on another jump in the economy's goods and services prices. U.S. TNOTE's and German BUND's are both gaining more than 0.3% in today's session.
• US industrial activity indicators published today came in below expectations. Both the PMI and ISM readings showed that actuality in the sector is declining. 
• Looking at the forex market, we can observe weakness in the US currency. The EURUSD pair even managed to go above 1.0900, but we are seeing a slight pullback in the evening hours. Nevertheless, the main sentiment on the pair remains upward in the medium term.
• The crypto market did not show any decisive direction today. The major digital currencies are trading mixed. In the evening hours, bitcoin remains in the regions of the reference level.

 

GOLD quotes are currently testing resistance stemming from the line drawn after the recent tops. If pierced above, resistance at the $2,000 level may be tested. In turn, its crossing may lead to the generation of another upward wave.

 

[Solid ECN ✔️]

Dogecoin - Chart of the Day

Dogecoin saw massive moves yesterday in the evening, with the coin rallying around 30% in less than 2 hours. While other cryptocurrencies also saw some gains, none experienced as big a jump as Dogecoin. It should not come as a surprise as a trigger for the move higher was Dogecoin-specific. Elon Musk changed Twitter's logo to Shiba Inu dog, a 'logo' of Dogecoin and its supporters. The move triggered an instant rally in Dogecoin, sending it to the levels not seen since early-December 2022. Musk himself explained that he is simply delivering onto promise he made in a tweet some time ago that he will buy Twitter and change its logo to Dogecoin logo.

Taking a look at the Dogecoin chart at the D1 interval, we can see that the strong upward move launched yesterday in the evening is continuing today. While price erased some of initial gains yesterday, Dogecoin bulls regained ground today and are pushing the coin towards the 0.10 area. A point to note is that the price of cryptocurrency managed to break above a mid-term support zone in the 0.0890 area, marked with previous price reactions as well as the downward trendline. A break above this area brightened technical outlook for the bulls and a test of the resistance zone ranging below 0.11 handle cannot be ruled out in the coming days.

[Solid ECN ✔️]

AUDNZD after RBA and before RBNZ

Australian dollar is one of the worst performing G10 currencies after Reserve Bank of Australia announced its latest monetary policy decision earlier today. The RBA decided to pause the rate hike cycle and keep the main interest rate unchanged at 3.60%. While such a decision was expected, wording of the RBA statement was changed so that it no longer suggests that future rate hikes are certain. Having said that, today's weakening of AUD should not come as a surprise.

 

Traders will be offered rate decisions from another Antipodean central bank tomorrow at 3:00 am BST - Reserve Bank of New Zealand. In this case, the market expects rates to be increased by 25 basis points with the Official Cash Rate (OCR) jumping to 5.00%. A 25 basis point rate move is fully priced in by money markets. Economists also seem to be convinced that a 25 bp rate hike is the next move - out of 21 economists surveyed by Bloomberg, 19 expect a 25 bp rate hike, 1 expects a 50 bp rate hike and 1 expects no change. This would mark another slowdown in the pace of tightening after the Bank slowed from 75 bp rate hike to 50 bp rate hikes in February. Moreover, it may also hint that the 5.5% peak OCR rate in latest RBNZ forecasts may no longer be a base case scenario with expectations swinging towards a lower terminal rate. This will be the focus of RBNZ announcement tomorrow - how much higher will the rates go. Money markets currently see a rate peak near 5.25% in December 2023.

 

 

Taking a look a AUDNZD chart at H1 interval, we can see that the pair has been recently trading sideways. Dovish RBA decision today led to quite a steep drop on the pair. AUDNZD broke below the 1.0755 support zone and continued to move lower until it reached 1.0720 support zone (orange circle). This is an important support zone, marked with previous price reactions as well as 200-hour moving average (purple line). A break below it could pave the way for a test of recent lows in the 1.0680 area. However, a hawkish RBNZ may be needed for this scenario to materialize.

[Solid ECN ✔️]

USDCHF rebounds to the 38.2% retracement of the week's trading range

The USDCHF fell sharply in the early NY session and in the process moved below the swing low going back to early August 2021 at 0.90178 (see red numbered circles on the daily chart above). The low price today reached to the nice round number of 0.9000 where some traders put a toe in the bearish water. Those buyers are breathing a sigh of relief as the price has indeed rebounded. The price has rebounded to a high of 0.90756.

That has taken the price above the February 2 low at 0.9058, and tested the swing low from March at 0.90706. The high correct price has extended to 0.90756 just above the March low.

Looking at the hourly chart, the move up off the low tested the 38.2% retracement of the week's trading range at 0.9075. Getting above the 38.2% retracement is the minimum retracement target of a trend like move i.e. the move down from Monday's high.

A move above the 38.2% retracement would next target the 50% retracement at 0.9098. Move above that and focus will turn toward the falling 100 hour moving average and swing area near 0.9120. Getting above all those levels would ultimately be needed if the buyers are to be taken more seriously.

Nevertheless, they could still get short-term satisfaction on a move above the 38.2% retracement.

[Solid ECN ✔️]

May ECB rate hike unsure after Lane comments

Lane, the ECB's chief economist gives a question mark on the May decision, pointing out that it will depend on inflation perpsectives, including the underlying ones. In view of this, Lane stresses that this is why the ECB does not give guidance for the next meeting and everything depends on the data and its outlook. On the other hand, he says that if the data performs as in the projections, May should bring a hike. However, it is unclear what kind. The market, on the other hand, is currently pricing that it should be a smaller hike, or 25 bps.

The EUR is not reacting to these reports, although we have seen slight increases on the pair in recent minutes. Further strong declines in US and European yields are progressing. U.S. yields are down 2.8 basis points today, and European yields are down 2.7 basis points.