EURO Bulls eye a return to the 1.0800 mark as price action looks promising. Will the ECB or FED President provide a catalyst, or will it be a grind higher?
This morning brought the release of the ECB Economic Bulletin which weighed slightly on the Euro sending EURUSD below the 1.0700 handle. There was not a lot that surprised here with the key takeaways being that the economy is likely to remain weak for the remainder of 2023. The ECB further elaborated that subdued foreign demand and tighter financing conditions are increasingly weighing on investment and consumer spending.
The lack of high impact data has left markets searching for a catalyst this week. Fed policymakers have provided mixed messaging this week and this has resulted in the mixed and choppy price action for the majority of the week. Following hawkish comments from policymakers Kashkari and Bowman today we heard from Rafael Bostic who struck a more dovish tone.
We do have comments from ECB President Christine Lagarde and FED Chair Jerome Powell later today. Market participants will be hoping that some clarity will be provided by the respective Central Bank heads ahead of some US data tomorrow.and the overall conditions remain pretty much the same. No signs of major escalation in both the Russia-Ukraine and Middle East conflict are likely to keep safe haven demand at bay.
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