ECB Acts, BOE Stands Pat, USD Rallies

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Forex Market News

ECB Mario Draghi, as expected, announces the start of the ECB government bond buying program on March 9. Buying bonds with negative yields up to the Deposit Rate (-0.2%). Monthly purchases totalling €60B, targeting inflation in line with ECB’s 2% objective. EUR had an initial nasty spike above 1.1100, (that should probably by investigated !!), then drops to test under 1.1010, and later under 1.10 to 1.0987. 1.0770 here we come!

BOE Maintains its current policy stance. A non-event with meeting minutes to come mid March.

US Jobless Claims and US Factory Orders not great numbers but failed to distract the USD momentum into Friday’s payrolls data.

So basically overnight we’ve seen the USD continue to rally across the board with EUR/USD again leading the way after Mario Draghi essentially came through with the goods. Even the NZD got a dose of selling overnight, squeezing some recent AUDNZD shorts out. UST 10yr yields little changed, OIL remains stuck in recent ranges.

AUD/USD Yesterdays data failed to inspire any significant reaction but RBA comments later in the day weighed on the ccy. Seller bar within current range setting up a ring high formation. I’m short here and looking for test of downside.
Resistance: 0.7850
Support: 0.7750, 0.7720

EUR/USD Belted. Another big seller bar breaking through recent lows. Stay short long term and adjust short term positions into payrolls tonight.
Resistance: 1.1100
Support: 1.0980, 1.0770

USD/JPY Wednesday price action bounces off the 61.8% retrace level followed by yesterday’s buyer bar. Momentum building higher still for another test of the 120.80 level. Helmets on for US Payrolls. Still long and looking to stay that way, but will manage risk into the data.
Resistance: 120.50, 120.80
Support: 119.80, 119.20

GBP/USD A very bearish week of price action for the cable. Wednesday’s seller bar has broken some short term support levels and closed under a 38.2% retrace level, as did yesterdays. Certainly feels like the phase 2 corrective rally is over and we should get some further confirmation today as to a potential new phase 1 selling opportunity is setting up.
Resistance : 1.5270, 1.5315, 1.5370
Support: 1.5195, 1.4990, 1.4950

NZD Forex Live article worth reading.

Bloomberg article on Payrolls Data:

For anyone who wants a more detailed view of US Payrolls tonight, a good read from Bloomberg.

USDSEK Potential breakout trade higher!

Good Luck

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