As the London session came to a close the British pound was a clear winner in the G10 currencies. Sterling was strongest against the Australian dollar, rising 0.82% after coming off the intraday high of 1.80200, following on from the Australian jobs data that came in under market expectations.
GBP’s strength weighed on the US dollar and the basket of currencies represented by the US dollar index hovered around the near-term support of $90.60 following the worsening US jobless claims, as the labour market recovery stalls. Cable was 15 pips shy of touching the 1.4000 big figure, leaving that door open for tomorrow’s session. A swing low from 2018 acted as resistance today, so all eyes will be waiting to see if the US dollar catches a bid or whether GBP can push on higher.
For the euro currency the EU consumer confidence data was the flash reading for February, so the first glimpse of the current economic outlook for consumers and this came in around expectations but still negative, so no real good news there.
EURGBP traded inverse to the GBPUSD today and pierced through the April 2020 low, closing lower twice below that key support on the H4 charts. 0.867 on the EURGBP now becomes resistance and we could see a further 100+ pip drop in the coming days unless the bull’s step in soon. Price and momentum now favour the bears.
What was really disappointing was the ECB’s realisation that they had been very optimistic on their rebound in growth predictions for the Euro Area and that Q2 of 2021 could be worse than anticipated due to continued lockdowns. The overall monetary policy remained the same so we are in need of a faster vaccination programme in Europe to see if we can get the economy up and running before the euro itself shows a return to EU growth rather than relying on US dollar weakness.
WTI crude data from the EIA weekly stocks shows a larger draw on inventory and shale supply disruptions. Crude is currently holding above the $61 price level but is trading lower than today’s open as it touches the top of the rising trend channel. Traders’ sentiment on the Activtrader platform shows that 67% of traders are remain bullish for higher prices. The USA is suffering freezing conditions in Texas causing further production declines, though the 7.3mb draw in commercial crude inventories was due to increased exports too. It was reported on the newswires today that the ‘Texas blackouts have shut in 40% of the nation’s crude oil production, taking more than 4mln barrels per day off the market’. The oil commodity currencies CAD, NOK and SEK were all trading a similar intraday volatile pattern today and essentially flat at the London close.