- The euro dropped sharply on Draghi comments after shooting up and was lower around 150
- We should pay close attention to the U.S. NFP data tonight.
The euro soared as ECB dropped a promise to “increase the size of its monthly bond buys if needed” in a statement after the announcement of its rate decision on Thursday night 8 March. However, the single currency turned lower later and declined around 150 pips on the day as ECB President Draghi revised down the central bank’s inflation projection for 2019 to 1.4% and he also concerned by the potential damages to the market sentiment by the recent trade disputes. We should pay close attention to the U.S. NFP data tonight.
The dollar index (DXY) reclaimed its key 90 handle. Its short term moving averages continued to show its strong upside momentum after they crossed above its long term moving averages which also moved quickly into the bullish and divergent state on the 1 hour chart. The dollar could rise further in London and New York sessions after a short-term corrective down move.
（DXY H1 chart）
As to non-USD currencies, the euro pulled back sharply to break the previous uptrend after reacting off its weekly high of 1.2445. The British pound turned lower and moved below its daily EMA60 after the end of the previous rally, looking for a new low of 1 March. The Aussie dollar dropped again after holding below its daily trend resistance again, could potentially challenge its monthly low.
（AUDUSD daily chart）
Let’s take a look at the precious metals now. The gold extended its decline in the form of an N bearish pattern after its H1-period downtrend was validated. With bearish order of its moving averages, a feeble rally in the price and a give-away of 1317 could foresee further weakness going forward.
（Gold H1 chart）
By JasonZou —— Chief Analyst of AvaTrade China
Disclaimer: The views and opinions expressed in this article are those of the authors and for the purpose of reference only, and shall not be relied upon by investors in making any trading decisions.