“Today’s Forex Trading Ideas” ECB Decision, Oils, Commodities and ADP Report…

Have you received the FXPrimus’s 33 USD No Deposit Bonus yet?
Get it for Free now!

FXPrimus 33 USD No Deposit Bonus

FXPrimus’s Market Analysit, Marshal would like to give you some trading ideas for today!

Listen to the Professional and Plan for your tradings!

USD keeps powering ahead

After yesterday’s excellent ADP report, the monetary policy divergence trade is back in force.

It’s particularly visible in USD/JPY, because Japanese bond yields are capped.

That’s probably the best pair to play that theme.

EUR could bounce today

The EUR has been under pressure recently as markets focus on the French elections.

Today’s ECB meeting could bring the focus back to the EU’s improving economics as they release the updated staff forecasts. EUR could bounce a bit.

Oil shock

Oil prices collapsed overnight.

Given the dramatic decline – over 4% in 24 hours – there could be some buying and prices could recover modestly.

I’m still negative longer-term, however.

ADP pushes USD up

A staggeringly good ADP report – higher than the highest estimate – pushed US interest rates higher, Fed rate expectations higher, and USD higher too of course (although not as much as might have been expected).

The monetary policy divergence trade is back in force.

Commodity currencies weaker

Commodity prices fell as the dollar strengthened and US interest rates rose.

The plunge in oil prices hurt commodities as well. As a result, AUD, NZD and CAD were the weakest G10 currencies, in that order.

JPY also fell as the interest rate spread between JPY bonds and other currencies’ widened.

GBP was little changed after the Budget revisions to the economic forecasts simply brought them into line with the Bank of England’s forecasts.

Oil collapses

Oil prices rebounded modestly after the weekly Dept of Energy figures showed inventories rose less than the API had said the day before, but the rally didn’t last long as market participants noted that in any event, inventories are at a record high and still climbing.

US oil production also rising and is now the highest since Feb. 2016.

It’s clear that US producers are taking advantage of the OPEC cuts to increase their output, thus offsetting the impact on the market.

Gold fell on the same old story: rising US bond yields and a stronger USD.