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MARKET BRIEFING – LONDON OPEN 10.03.2016
Today’s session will be marked by the European Central Bank Minimum Bid Rate decision which will be announced at 12:45 pm London time.
The interest rate for the main refinancing operations providing the volume liquidity to the banks has declined to all times low in October 2014 and remains unchanged at 0.05% since then.
The benchmark rate is expected to stay unmoved this time, as deflationary pressures due to the deflated oil price remain, among the others, a heavy toll on the inflation rate in Europe, which is well below 2% target.
Nevertheless, the story is different with the deposit interest rate, which first went negative in June 2014, when ECB adopted a -0.10% level, meaning that banks are now charged with keeping their funds with ECB. Since then further two rate cuts have taken the rate to -0.30%. This time, market participants are pricing in at least 0.1% decrease, with the interest rate, in this case, will be -0.4%.
Short term interest rates are playing a major role in a country’s currency valuation. Hence, a market volatility usually rises during the time of the release.
The importance of this announcement will be amplified by the ECB press conference held at 1:30 pm London time, where additional monetary easing measures are expected to be announced.
The Bank’s primary means to communicate to the investors, the press conference will usually cover factors that affected the current decision including the inflation pace and the overall economic outlook.
During the afternoon trading session, traders will be watching the US unemployment claims data, with the number of individuals who applied for the unemployment insurance during past week forecasted to improve to 272.000 down from 278.000 of the previous release.
EURUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.1085
Target 2: 1.0910
Projected range in ATR’s: 0.0089
Daily control level: 1.1035
GBPUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.4350
Target 2: 1.4070
Projected range in ATR’s: 0.0142
Daily control level: 1.4170
USDJPY
The intraday technical outlook
Trend 1 hour: Down
Target 1: 114.50
Target 2: 112.15
Projected range in ATR’s: 1.18
Daily control level: 114.30
USDCHF
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.0060
Target 2: 0.9885
Projected range in ATR’s: 0.0086
Daily control level: 0.9895
USDCAD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.3380
Target 2: 1.3110
Projected range in ATR’s: 0.0134
Daily control level: 1.3445
AUDUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.7570
Target 2: 0.7395
Projected range in ATR’s: 0.0088
Daily control level: 0.7400
GOLD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1275.00
Target 2: 1229.00
Projected range in ATR’s: 22.82
Daily control level: 1278.00
OIL
The intraday technical outlook
Trend 1 hour: Up
Target 1: 40.00
Target 2: 36.00
Projected range in ATR’s: 1.79
Daily control level: 35.95
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