FOREX PRO WEEKLY, March 06 - 10, 2017

Sive Morten

Special Consultant to the FPA
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Fundamentals

(Reuters) - The dollar slipped against a basket of major currencies on Friday after Federal Reserve Chair Janet Yellen said that raising interest rates this month would be appropriate as long as the economy continues to improve as expected.

Yellen's remarks follow hawkish comments in recent days from a slew of Fed speakers and cement a likely rate hike at the Fed's next meeting on March 15.

Analysts said the rate increase had largely been priced in before Yellen's comments, sending the dollar lower on Friday afternoon as some investors took profits.

"There's a lot of positive news now priced into the market, and I think we'll probably see some profit-taking, so I think we'll probably see the dollar weaken from here," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.

Yellen also said rates are likely to rise faster this year as the economy for the first time in her tenure appears clear of any imminent hurdles at home or abroad.

"Yellen's comments have caught up with market expectations, in that she's looking for three rate moves this year," Borthwick said.

The dollar index, which measures the greenback against a basket of six major currencies, was down 0.7 percent. It is up about 0.4 percent this week and on Thursday, hit a seven-week high of 102.26.

Futures traders now are pricing in an 86 percent chance of a Fed hike in March, up from 35 percent on Tuesday, according to the CME Group's FedWatch Tool.

Against the Japanese yen the greenback was down 0.24 percent.

The euro rebounded from recent weakness to rise 0.93 percent against the dollar after a poll showed French far-right candidate Marine Le Pen's chances in the country's presidential election dimming.

The political race, however, has not been the main driver for the euro's recent weakness, said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.

"That's more about the shift in relative yields and monetary stance given the move in short-term rates in the U.S.," he said.

U.S. two-year Treasury yields hit their highest in more than 7-1/2 years on Thursday.

Rate hike expectations also weighed on the New Zealand dollar, which was on pace for its worst week in eleven against the greenback. On Friday, the kiwi dollar was down 0.41 percent.


Although as we see, situation has changed a bit and now March rate hike stands on the table instead of June, but Fathom brings some other interesting thoughts on perspectives of rate hike through the year:

FOMC to hold fire for now
by Fathom Consulting

According to the Minutes of the Federal Open Market Committee’s latest meeting, participants accept the need to raise the fed funds rate again “fairly soon”. That is more likely to mean June than next month, in our view.

Feb-27.jpg


Even though we expect US GDP and inflation to rise a lot faster than consensus this year, we anticipate just two 25 basis point increases in the fed funds rate in 2017. We saw nothing in last Wednesday’s Minutes that led us to question that view.

Indeed, we think that the Fed will let the economy run a little hot, rather than tightening interest rates aggressively this year. If we are right, then investors and the FOMC will reassess the prospects for monetary policy further ahead, bidding up the dollar and Treasury yields later this year.

Admittedly, this outlook is subject to greater-than-usual political uncertainty. Not only will the scale and timing of Mr Trump’s promised fiscal splurge have a significant effect on the economy, but the new administration is now responsible for filling three FOMC board seats this year following Daniel Tarullo’s resignation.

COT Data

(Reuters) - Speculators reduced bullish bets on the U.S. dollar in the latest week, pushing net longs to their
lowest since early October, according to Commodity Futures Trading Commission data released on Friday and calculations by Reuters.

The value of the dollar's net long position totaled $13.01 billion in the week ended Feb. 28, from $15.02 billion the previous week.

Analysts said this week's decline in net long dollar positioning could be temporary in the wake of stronger signals by the Federal Reserve that it may raise rates this month. On Friday, Fed Chair Janet Yellen gave her strongest signal yet that the U.S. central bank could nudge rates higher when it meets this month.

Several of Yellen's colleagues at the Fed have also been signaling a move in March the past several weeks.
"The (dollar) bulls are finally listening to the cohesiveness of Fed officials who have been saying all along (doves and hawks) that conditions are prime for tightening," said Kathy Lien, managing director of FX strategy at BK Asset Management in New York.

The dollar fell on Friday in the wake of Yellen's remarks, but that is more due to profit-taking since traders before the Fed chair's remarks wagered that she would strike a hawkish tone.

According to Fed fund futures date, the odds of a rate hike this month sits at 90 percent, compared with 40 percent the week before.


On EUR CFTC chart does not bring some crucial information as it is dated on 28th of February and doesn't include Friday's collapse of USD. Still, in the beginning of the week it shows that new longs have been opened, as net short position has contracted while open interest has increased:

upload_2017-3-4_12-34-45.png


Technical
Monthly


Despite strong rally on Friday - monthly chart is too large for it and our monthly analysis mostly stands intact. February close doesn't bring us bullish grabber, so let's see what we will get in March. While market actively was pricing-in March rate hike during last week, as soon as it has got a confirmation by Yellen aknowledgement in her speech - investors have turn to profit taking. It means that current rally has mostly technical reason and doesn't not indicate any changes in force balance.

We know that fundamental background mostly looks bearish for EUR - potentially more hawkish Fed policy, ECB QE prolongation, coming elections in many EU countries, bringing more uncertainty. After GB, separatistic sentiment start to appear in other countries of EU, as Italy, France, Netherlands, Spain that are not satisfied with Brussels domination in governing EU.

Speaking on big picture, On a way down, guys, EUR has passed through all major Fib levels. Last one was at 1.12 area and now we do not have any other ones below current market. Also price has dropped below 1.27 extension of this big butterfly. Thus, on monthly chart the only logical destination point stands at parity - 1.618 butterfly extension, chanell trend line support and YPS1.

Besides, right now EUR is testing YPP, but unsuccessfully yet.

Also take a look at different behavior near low border of channel. Previously when market has touched it - it shows immediate upside pullback, it was V-shape reversal. Right now behavior is absolutely different, price just hangs on the border and shows no upside action. Any tight consolidation near trendline could become a sign of coming breakout.

Thus, based on monthly chart we could make two major conclusions. First is - real bullish trend could be re-established only if EUR will erase reversal candle and overcome its top above 1.16. Our next target on Monthly chart is parity - 1.618 Butterfly extension, YPS1 and trendline support.

In general guys, we think that steps that already have been announced by ECB and Fed should be enough to push EUR right to parity during "price-in" process, when market will "anticipate" them. But this picture is not static, it's dynamic. And iti will depend on real action from Fed, Trump administration and ECB.
eur_m_06_03_17.png


Concerning bullish perspectives... they exist here, but they stand at even larger picture:

eur_m1_06_03_17.png


Picture shows classical action. Take a look that since 1999 - EUR was forming upside reversal swing that lasts till Dec 2007. Now market stands in deep retracement - this is typical action as new upside reversal swing has been formed. Based on this picture EUR is approaching to area where this retracement should over and it could get chance to starts extension leg of bull trend that could lead EUR as far as to 1.76-1.82 area. Also you could recognize here some signs of reverse H&S pattern. That's why on big weekly picture we also have made a suggestion on big H&S pattern with head around parity....

Weekly

As market shows strong reaction on Fed promising of rate increase, let's talk on bullish perspectives that could be based on this event. Actually we're coming to 2-week doom&gloom. First is NFP release, second - Fed decision. Besides, second week could turn to real nightmare, if NFP will show poor numbers...

So, let's see what could happen. Right now on a way up EUR has reached 1.0830 - 3/8 major resistance, tested YPP and now we're watching whether price will form AB-CD upside action or retracement will be limited by just single leg up. Honestly speaking, here, even reaching of 5/8 resistance is acceptable. It means that if our daily H&S pattern will work and EUR will reach 1.10 area - this will not erase yet long-term bearish picture. Besides, 1.08-1.09 range is rather strong, since it's weekly K-resistance, that also is Agreement and includes YPP. Hardly profit taking process that we see right now will be sufficient to break it through.

It means that upside retracement could just re-test 1.0830 level and complete minor 0.618 AB-CD target.

On a way down our final destination stands the same - 1.618 point coincides with 1.618 butterfly target around 0.97-1.0 area. Although we have multiple targets inside 1.0-1.05 area, ther are all minor ones.

Finally, butterfly could become part of large reverse H&S pattern, that we have discussed above. But whether it will be formed or not will depend on fundamental factors, D. Trump ficsal policy, US economy data and Fed reaction. Thus, we have more or less single road to parity, but later, around it we will get a crossroads...If there will be something bearish that wasn't priced in yet - EUR could drop even further. If not - H&S will start to form...

That's being said, on coming week we probably will work mostly with upside retracement continuation:
eur_w_06_03_17.png


Daily

Although we've talked on minor upside retracement on Friday, we do not expect so explicit comments from Yellen on rate change. Thus, recent rally signficantly has changed intraday picture and bring new life to our H&S pattern.
So, lows of right shoulder have survived due Fed surprise comments. And this is the miracle that saves bulls, at least by far. It seems that this is last chance of upside action that we've mentioned previously.

Trend has turned bullish here. Our major analysis will stand on intraday charts. Here, despite of rally, we do not see something really new, as our patterns are still the same. As overbought level stands around 1.07 area, we mostly are interested with upside targets that stand below it. That's why currently we will not talk on reaching neckline, 1.083 level etc... Let's focus on objects that could be reached during coming week:
eur_d_06_03_17.png


Intraday

So we have two different patterns, and they have approximately the same target around 1.0720 area. First one stands on 4-hour chart and we've mentioned it in our video on Friday - this is upside butterfly. But on Friday it was unclear what reason could form it. As you can see it has 1.27 extension around daily overbought area and 1.07 Fib resistance.
Right now market just returned back to 3/8 Fib resistance and MPP. And here we should not drop to euphoria but control breakout of our flag consolidation. Here EUR should not return too deep back inside it.
eur_4h_06_03_17.png


On hourly chart we have 2 patterns. First one is double bottom, but as it has mostly the same target as butterfly - it is not very interesting on Monday. But second one - is potential reverse H&S. Take a look that our butterfly that we've traded recently has become a left shoulder this is very typical.

Thus, let's focus on this H&S pattern. It suggests appearing of right shoulder, when EUR could test new WPP around 1.0580 area. And it brings closer targets. First one will stand around WPR1 @ 1.0670. If market indeed will start upside action, later we will turn to more extended targets of 4-hour butterfly and Double bottom patterns:
eur_1h_06_03_17.png


Conclusion:

Despite changing of short-term sentiment, we do not think that it brings some real hazard to long-term bearish tendency yet. Thus, right now it is better to treat it as retracement as fundamental background slightly has changed.
Most part of the week we probably will deal with this upward reaction on Yellen speech. Major day will be Friday, as NFP release could bring frustration to investors if numbers will be poor. And it is very difficult to forecast how this will impact on March Fed meeting results.


The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.
 
On Friday there was a nice DRPO sell setup in USDJPY 4HR. So it may also support some Intraday weakness for US dollar. besides there is NFP on Friday so it could be good reason for the US-dollar bulls to reload from better level.
 
ON FRIDAY 3/4/2017 WE HAVE GOT A REVERSAL BEARISH CANDLE IN USD/CAD.IF THERE EXISTS SOME PATTERN ON 4HR CHART,PLEASE HINT TARGET.
 

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ON FRIDAY 3/4/2017 WE HAVE GOT A REVERSAL BEARISH CANDLE IN USD/CAD.IF THERE EXISTS SOME PATTERN ON 4HR CHART,PLEASE HINT TARGET.
Well, at first glance it seems - DRPO "Sell" and 2.0 bearish Crab:
But, you need to check resistance - if market stands at daily or weekly resistance, these patterns are reliable. If not - they could fail.
 

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Good morning,

(Reuters) - The dollar steadied on Tuesday as investors widely expect the Federal Reserve to raise interest rates next week and are waiting for clues on the likely pace of hikes, including this week's U.S. job data.

The dollar index, which measures the greenback against a basket of six major peers, last traded at 101.65, ticking up from a one-week low of 101.22 on Monday.

A Fed policy decision is due at the end of its March 14-15 meeting. Fed Chair Janet Yellen said on Friday raising interest rates this month would be appropriate, if jobs and inflation data hold up.

While a hike next week is "near certain", investors "are still doubtful if the Fed would raise rates three times this year," said Takahiko Sasaki, market economist at Mizuho bank.

"Investors can't take a big move before Friday's U.S. jobs data and the Fed's economic projections next week," said Sasaki.

Concerns over President Donald Trump's ability to focus on his promised economic policies remained after the U.S. leader alleged over the weekend that he was wiretapped by his predecessor, Barack Obama.

Some analysts say the dollar would not see a further rally unless Trump announces detailed economic policies.

"The dollar is not likely to gain further against the yen, with an expected range around 111 to 115 yen during March," said Masashi Murata, senior currency strategist at Brown Brothers Harriman.

"Investors are seeing difficulty for Trump to immediately legislate tax cuts and infrastructure spending. But they can't sell either because the March rate hike is highly likely," added Murata.

The euro last stood at $1.0582, still short of its two-week high of $1.064 touched on Monday.

Francois Fillon won his party's backing to be its candidate for French president, hours after a former prime minister Alain Juppe ruled out an election bid.

A poll on Friday had shown that if Juppe replaced Fillon as the centre-right candidate, he would likely win the election's first round, with centrist candidate Emmanuel Macron coming second - a scenario that would knock far-right leader Marine Le Pen out of the race.

Party leaders swung behind Fillon despite allegations that he had misused public funds.

The dollar edged up 0.1 percent against the yen to 113.92 yen after falling to a one-week low of 113.53 yen on Monday as geopolitical uncertainties prompted investors to buy the perceived safe-haven Japanese currency.

North Korea's launch of four ballistic missiles had spurred yen-buying on Monday.

Markets had a muted response to a stronger-than-expected U.S. factory orders. New orders for U.S.-made goods increased for a second straight month in January, suggesting the recovery of the manufacturing sector was gaining momentum.

The Australian dollar inched higher after the central bank kept interest rates unchanged and showed no hint of considering another easing, underlining the outlook for steady policy.

The Reserve Bank of Australia's (RBA) March policy meeting ended with rates unchanged at 1.5 percent, as widely expected, and the accompanying statement was generally upbeat.

The Aussie was last up 0.6 percent at $0.7621, after fetching $0.7633 on the policy decision.

On EUR market is still forming our hourly H&S pattern, that we've discussed in weekly research. Thus, currently we do not see any necessity with updating EUR situation. That's why today we will take a look at CAD. As mostly markets across the board are waiting for NFP, on CAD we will discuss tactical setup.

On daily chart market stands at moderate resistance. It includes daily overbought, AB-CD 1.618 extension target and MPR1. Fib level also stands relatively close, but mostly it has been broken already. As market is coming to NFP release, short-term speculators could turn to profit taking and may be we could count on some retracement here:
cad_d_07_03_17.png


On 4-hour chart market has completed 2.0 bearish Crab and confirmed DRPO "Sell" at revesal point. Currently we do not have any downward AB-CD patterns and can't precisely estimate the target. But based on DRPO framework, market could reach 1.3250 area:
cad_4h_07_03_17.png


Thus, if you're scalp trader and search chance to go short - you could think about this setup... And of course, we will continue to keep an eye on EUR scenario. Tomorrow probably we will return back to discussion of it.
 
Good morning,

(Reuters) - The dollar was a touch lower on Wednesday, its modest advance from the previous day bogging down as investors started to take a wait-and-see attitude ahead of Friday's U.S. jobs report.

The dollar last week hit a two-month high against a basket of currencies as Federal Reserve officials talked up the chances of a rate hike this month, but the greenback is now sitting in a narrow range with an increase seen largely as a done deal.

"The dollar's upside looks limited as the market has almost fully priced in a March rate hike, with focus now shifting to how many times the Fed can tighten policy this year," said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.

"With attention on whether the Fed can conduct three hikes this year, Friday's jobs data will provide important cues as to whether an inflation-inducing wage increase is taking place."

The euro rose 0.1 percent to $1.0561 after declining by about the same amount the previous day.

The dollar index, which hit 102.260 on March 2, inched down 0.1 percent to 101.740. It gained about 0.15 percent overnight, when the dollar was buoyed by declines in European peers.

The pound nudged up 0.1 percent to $1.2210 after dipping 0.3 percent overnight. On Tuesday, sterling slid to a seven-week trough after weak consumer spending data added to worries that Britain's economy is slowing as it prepares to trigger its exit from the European Union.

The Swiss franc was little changed at 1.0135 per dollar after retreating to 1.0170 overnight, its weakest since Jan. 11.

The currency had fallen to multi-week lows on Tuesday, hurt by a rise in the Swiss National Bank's foreign exchange reserves and statements from SNB Chairman Thomas Jordan that the franc was "significantly over-valued."

The dollar was down 0.3 percent at 113.650 yen after rising modestly to 114.160 overnight.

The greenback has had a difficult time staying above the 114 yen threshold amid uncertainty about Washington's potentially protectionist trade stance. President Donald Trump's administration is expected to react should the dollar strengthen excessively against the currencies of major trade partners such as Germany, Japan and China.

Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo, said coming events including the U.S. Treasury's semi-annual currency report in April are events that "could push the trade theme to the fore" for President Donald Trump's administration.

The Australian dollar rose 0.1 percent to $0.7593. The Aussie had spiked to $0.7633 the previous day after the Reserve Bank of Australia kept interest rates on hold and gave an upbeat assessment of the economy, hinting that it does not intend to loosen policy this year.

The New Zealand dollar fell to a two-month low of $0.6962, hurt by a slide in the price of milk.


So, EUR almost has reached predefined support area where we should get an answer up or down... Recently EUR has diminished market swings, so daily picture mostly stands static within a month already. Our H&S pattern holds well by far, despite dramatic action around the bottom of right shoulder. Price has challenged it three times, and finally on Friday has shown more or less acceptable jump out of it:
eur_d_08_03_17.png


As we've discussed in weekly research, on intraday chart we have multiple patterns - butterfly, double bottom and inner H&S. Actually, guys, I'm not sure that we could treat it purely as h&S, because, usually it should be formed separately and form the bottom, or top. But here, it stands inside price consolidation. Thus, if you do not like it - you could treat it just as potential upside AB-CD. If you let me, I'll keep H&S term, just for clarity to better show what I'm talking about.
All these patterns have different targets, but H&S ones are closer. That's why we decided to focus first on them. It's target stands at 1.07 Fib resistance:

eur_4h_08_03_17.png


Now we're coming to most important moment as price is approaching to the bottom of right shoulder. Downward action takes the shape of falling wedge that is potentially bullish pattern. Price action inside of it also looks choppy, and mostly has features of retracement.
Inside the wedge we have AB-CD pattern with target around Fib support and also small butterfly that could finalize downward action. Thus, if you're looking possibility for long entry - you could pay attention to this scenario. Bears, vice versa, should wait for donward breakout fo 1.0550 Fib support.
eur_1h_08_03_17.png


Thus, today we should know perspective of price action till the end of the week...
 
Good morning,

(Reuters) - The dollar stood tall on higher U.S. Treasury yields on Thursday, after a surge in U.S. private-sector jobs in February cemented expectations the Federal Reserve will raise rates next week.

The dollar index, which measures the greenback against six major peers, was last up 0.1 percent at 102.13, not far from a March 2 peak of 102.26, which was a level not seen since Jan. 11.

The ADP National Employment Report showed on Wednesday that private payrolls grew by 298,000 jobs last month, the largest increase since December 2015. The gain was well above economists' expectations for a 190,000 increase.

The ADP figures come ahead of the U.S. Labor Department's more comprehensive non-farm payrolls report on Friday, which includes both public- and private-sector employment.

Traders have now priced in around a 90 percent possibility that the Fed will raise interest rates this month, up from around a 30 percent chance early last week, according to CME Group's FedWatch tool. Hawkish comments from a string of Fed officials, including Chair Janet Yellen, have boosted bets for a rate hike.

The strong gain in private-sector jobs pushed benchmark U.S. Treasury yields to their highest since December. [US/]

The 10-year U.S. Treasury note yield hit 2.583 percent, a level last seen on Dec. 20. It last stood at 2.563 percent. Yields on two-year Treasury notes also climbed to 1.378 percent on Wednesday, the highest since August 2009.

The dollar was last up 0.1 percent at 114.41 yen. The greenback was helped by widening U.S.-Japan interest rate differentials. It had risen as high as 114.75 yen on Wednesday, not far from a two-week high of 114.955 touched on Feb. 15.

However, investors were cautious ahead of Friday's non-farm payrolls as the ADP figures have proven a poor indicator for the awaited jobs report by the government, which is favoured by the Fed.

"After a change in ADP's methodology in October, its figures have become closer to the government's data. So we could expect an upbeat figure on Friday," said Junya Tanase, chief currency strategist at JP Morgan Chase Bank.

"However, investors have already priced in February's strong job growth, so it is less likely that the U.S. Treasury yields jump once more and the dollar rallies unless the data is very strong," added Tanase.

The euro last stood at $1.0537, wallowing near a one-week low of $1.0533.

Investors are awaiting the outcome of the European Central Bank's March meeting later on Thursday. The ECB is expected to keep its ultra-loose monetary policy on hold despite rising inflationary pressures.

However, some analysts have warned the central bank may sound unexpectedly hawkish.

"As economic growth and inflation are picking up, our economists predict the ECB to be hawkish and start policy tightening preparation as early as April," said Osamu Takashima, chief FX strategist at Citigroup Global markets Japan.

"Markets have not priced in a hawkish ECB yet, so if this happens European bond yields would jump and prompt the euro to outperform," added Takashima.

The ECB has been casting a cautious eye towards upcoming elections in the Netherlands and France during an upsurge in populist, anti-establishment sentiment.

On Wednesday, growing worries that France's far-right leader Marine Le Pen may stage a surprise win pushed up the cost of hedging against volatility in the safe-haven Swiss franc versus the euro in the coming two months to its highest level since November.

Although polls suggest Le Pen could lose the May 7 second round elections to current favourite Emmanuel Macron or Francois Fillon, last year's unexpected votes for Brexit and Donald Trump have left investors wary of surprises.


So, EUR currently keeps less and less chances on upside reversal. The only factor that could change situation, at least for awhile - is unexpected ECB hawkish comments. But chances are not very strong for this.

On daily chart EUR stands above major support area and theoretically chances on upside action, based on our H&S are still exist, but last 4 sessions market is falling and almost erased Friday's rally. Thus, trend stands bullish but price action is not. Recent behavior looks not quite supportive for upside breakout.
eur_d_09_03_17.png



As a result, on 4-hour chart we have to deny or previous idea of upside butterfly, as EUR shows right now too deep action. In fact, no upside breakout of the channel has happened. We could accept minor return to WPP, but right now market shows too deep action for bullish market:
eur_4h_09_03_17.png


Also EUR shows irrational behavior in relation to our hourly setup. ADP report was rather positive, thus, price has dropped below targets and Fib support that we've specified yesterday. It shouldn't be so, if we suggest that EUR is turning up. EUR right now stands significantly lower harmonic bottom in relation to left shoulder and below WPS1. Thus, chances on breaking of whole bullish construction are rather high right now:
eur_1h_09_03_17.png


Overall picture makes us think that bears should wait for final breakout down and look for total collapse of daily bullish setup. For bulls it is very risky taking any attempt to go long. As there is just 1 day till NFP, market has not room for breathing and as you can see - it leads to nervous choppy action. Besides, on other assets and currencies, we also see significant drop - Gold, NZD, AUD... In such circumstances, only confident bullish traders could try to go long.
 
Good morning,

(Reuters) - The dollar fell against a basket of currencies on Thursday, while the euro gained after European Central Bank head Mario Draghi suggested it was less necessary to prop up the market through ultra-loose monetary policy.

Draghi said the ECB removed a reference to using all available measures to induce growth and inflation "because the sense of urgency is not there." The Governing Council had also discussed removing a reference to lowering interest rates in its forward guidance and had increased its inflation and growth profile for the euro zone next year, he added.

The euro rose above the $1.06 level during Draghi's remarks, reversing earlier selling that had brought it to a six-day low. It was last up 0.5 percent at $1.0593.

The dollar index, which tracks the greenback against the euro and five other major world currencies, hit a session low of 101.700 as Draghi spoke. It was last down 0.2 percent at 101.880.

"The ECB raised the euro zone inflation and growth profile for 2018, and (Draghi) reduced the risks, although they still remain on the downside for growth," said Richard Cochinos, head of European G10 FX strategy at Citigroup in London. "It’s clear the market’s taken it as somewhat positive (for the euro)."

The central bank did not announce any changes to its monetary policy in the statement.

The dollar was due for a pullback, said Joseph Trevisani, chief market strategist at WorldWideMarkets in Woodcliff Lake, New Jersey.

Expectations for a U.S. interest rate hike surpassed 90 percent this week following Wednesday's release of a private-sector payrolls report showing employers added 298,000 jobs in February and hawkish statements from Federal Reserve officials.

Oil- and commodity-linked currencies including the Canadian, Australian and New Zealand dollars and the Norwegian crown hit multiweek lows against the dollar after a 5 percent slump in oil prices on Wednesday.

"The Canadian dollar has been a victim of hawkish interest rate expectations in the United States, lower oil prices and a Bank of Canada that has expressed concern over the outlook for the Canadian economy," analysts from currencies exchange LMAX said in a morning note.

"Wednesday’s stellar U.S. ADP print and another big slide in oil have opened fresh 2017 lows."

Before the ECB news conference, the dollar hit a three-week high against the yen, its fourth straight day of gains against the Japanese currency.

It was last up 0.55 percent at 114.95 yen.


So, yesterday we've said with some irony, that if ECB will give hint on reducing of EU economy stimulus, i.e. contracting of QE program, EUR could get a chance on upside action. But this indeed has happened. Draghi has given the hint that EU economy situation doesn't demand too hard stimulus measures. As a result we've got bullish stop grabber on daily chart.

This pattern is formed on consolidation, so it is not as reliable as the one that is formed during thrust action, but still, this is something. Other picture stands the same - EUR, while stands above 1.0525 lows, keeps chances, at least theoretical on upside continuation.

This grabber also gives us better precision on invalidation point. Thus, if EUR will drop below it, this will be final drop, probably. So, setup has not changed for bears.
eur_d_10_03_17.png


Concerning bulls, yesterday we've said that only confident trader could take long position right now. Our view was - insufficient context for going long. Please understand this correctly guys. Right now we do not have clear bullish technical background, no signs of thrust. All that we have is stop grabber on consolidation and may be poor NFP. So, in fact long position right now is a bet on poor NFP without any technical background. Our thought - this is not enough.

Still, different traders have different confidence and skills degree. So, if you feel confidence - it is possible to go long, as some patterns still exist here...

On 4-hour chart market has returned back to trendline:
eur_4h_10_03_17.png


As our wedge finally has been broken up - now we deal with this wide AB-CD pattern. Take a look that EUR has completed it's minor 0.618 extension right at trendline resistance. This AB-CD pattern is important. Because if EUR indeed is bullish - price should not show deep retracement, and especially drop back to lows, since this is just minor target has been hit.

If this will happen still, it could mean that EUR is not bullish enough, and significantly increase chances on downward breakout. So, we probably will get the answer within few hours...
eur_1h_10_03_17.png
 
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