During the night, the negative sentiment for the stock market was crystallized during the bust of Wall Street from the last few tens of minutes of trading. Futures on the SP500 are below 2700 points, the EUR/USD subsided at 1.23 and USD/JPY is below 107.50. Profitability of 10-year US Treasury bonds is growing towards long-term highs at 2.95%. Oil is also under considerable pressure as the barrel price in New York falls towards USD 61. An ounce of gold is valued at 1324 USD - the negative effect of the stronger dollar and cheaper bonds over the positive effect of discounts on stock exchanges.
On Thursday 22th February, the main event of the day is ECB Monetary Policy Meeting Accounts release, but the market participants should keep an eye on German Ifo sentiment data release, Second Estimate GDP data from the UK, Retail Sales data from Canada and Unemployment Claims data from the US. Moreover, there are three speeches of the FOMC representatives: William Dudley, Raphael W. Bostic, and Robert Kaplan.
EUR/USD analysis for 22/02/2018:
Yesterday the FOMC Meeting Minutes were published - today it is the European Central Bank turn. The global investors should do not expect ECB to bring revelations because, after the turmoil caused by the notes from the December meeting, the Governing Council tended to learn to control the message. It does not change the fact that the market will focus on comments regarding the strength of the currency and in particular the number of decision-makers ready to extinguish the purchase of assets in a very decisive manner and start to try to raise interest rates.
Let's now take a look at the EUR/USD technical picture at the H4 time frame before the ECB Meeting Minutes are released. The support zone between the levels of 1.2333 - 1.2295 was violated, so now the next technical support is seen at the level of 1.2212. The market conditions are now oversold at this time frame, so a bounce higher to test the resistance zone from the below will not be a surprising move. Nevertheless, a weak momentum indicator supports the bearish outlook.
Market Snapshot: USD/JPY retraces almost 50%
The price of USD/JPY pair has retraced almost 50% of the last leg down and stalled below the level of 108.10. The recent gains are now being consolidating and the market might again start to move higher to hit the 61% at the level of 108.60. Please notice this zone between the levels of 108.12 - 108.43 is a key technical resistance zone for bulls and might be a tough nut to crack.
Market Snapshot: SPY reversing down
The price of SPY (SP500 ETF) has closed close to the level of 270.00 yesterday after a reversal and possible Double Top formation around the level of 275.27. The next technical support is seen at the level of 268.26 and 266.60. The momentum is about to drop below its fifty level and that could even accelerate the sell-off.
