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ECB monetary decision today. On the road of policy normalization?

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What’s new?

The EUR soar yesterday top crossing its major horizontal support at 1.0866. Technicals shows a potential bullish reversal. All eyes are now on the ECB, which is set to maintain its speedier withdrawal of stimulus at the tonight meeting. The corporate earnings season will start tonight as well with majors U.S bank publish Q1 2022 results. Investors will assess if the war in Ukraine, supply chain disruptions, and high inflation are hurting profits…

The JPY bounced back from a two-decade low against the USD after shorter maturity Treasuries climb suggesting investors are repricing at what pace the FED is wiling to go in hiking cycle. Indeed, U.S consumer-price published last today show that inflation might have peaked.

China is expected to cut a key policy interest rate for the second time this yearn Friday and reduce the reserve requirement ratio soon that will free some fresh capital in the market.

What’s in the pipe?

  • ECB rate decision, Thursday
  • U.S. retail sales, initial jobless claims, business inventories, University of Michigan consumer sentiment, Thursday
  • Cleveland Fed President Loretta Mester, Philadelphia Fed President Patrick Harker due to speak Thursday
  • U.S. stock and bond markets are among those closed for Good Friday

FX rates

USD/JPY @ 126.04 - bullish trend

RSI : Overbought

Williams %R : Overbought

Bounce off oblique resistance : 126.49

EUR/USD @ 1.0908 - Bearish trend

Potential bullish reversa

GBP/USD @ 1.3135 - Bearish trend
Potential bullish reversa

AUD/USD @ 0.744

USD/CNH @ 6.3795

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