RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Currencies

ECB Highlights

Posted 03/09/2018 9:35AM CT | John Caruso

Yesterday’s ECB meeting struck a more “Dovish” tone when all was said and done.  The euro market initially reacted to the ECB’s removal of their “pledge to increase bond purchases (QE) if necessary.  The ECB also mentioned that QE is set to run until September of this year.  The euro erased it’s early morning losses and rose to 1.2453 (March basis).  However, during the Q and A session, Draghi lowered his inflation forecasts and further explained that he is ultimately dependent on the incoming data.  So with a “data dependent” Draghi, and slower PPIs and CPIs coming in across the Eurozone region, the euro took that as a potentially “Dovish” signal and erased its gains by nearly 150pts.  We’ve seen a notable slowdown in the incoming inflation data from Germany, and this morning Italian PPI slowed along with Czech CPI slowing y/y.  The euro closed out yesterday’s session at 1.2318, further confirming a “lower high” on the charts and an immediate term bearish set up for the euro.  Based on the slowing incoming European data coupled with the blowout US NFP data this morning (313K jobs created vs 205K exp), we believe the euro could trade back down to 1.2200 in the immediate term (1-2 weeks).

Euro Mar ’18 Daily Chart

euro_mar18_daily_chart

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John Caruso

Senior Market Strategist
Follow John on Twitter @JCarusoRJO. John began his career at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. Prior to becoming a broker he did some individual trading on his own, where he first began to study and interpret different market strategies and ideas. In 2006 John moved over to Lind-Waldock where he began to service clients as a professional broker. He joined RJO Futures in 2011.
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