📌 Slight Euro Strength on German Conservative Victory, but Market Lacks Clear Direction
Market Summary
- Euro (EUR): The victory of the conservative bloc (CDU/CSU) in the German general election provided a temporary boost to the euro. However, since they failed to secure a majority and the far-right AfD made significant gains, political uncertainty is weighing on the euro’s upside potential.
- US Dollar (USD): The dollar remains strong amid safe-haven demand, driven by President Trump’s controversial “dictator” remark regarding Ukraine and the upcoming US-EU summit.
- British Pound (GBP): The market is awaiting speeches from Bank of England (BOE) officials, focusing on any potential changes in policy stance.
Major Currency Trends
EUR/USD (Euro/Dollar)
- Movement: Shifted from early euro buying to dollar buying dominance.
- Factors:
- The German Ifo Business Climate Index fell short of expectations, adding selling pressure to the euro.
- European concerns over President Trump’s approach to the Ukraine conflict also weighed on the euro.
- Outlook: Bearish bias on the euro, with 1.05 acting as a strong resistance level.
USD/JPY (Dollar/Yen)
- Movement: After a brief yen appreciation, the pair rebounded to 150 yen, temporarily dismissing the sub-150 scenario.
- Factors:
- Japan’s Consumer Price Index (CPI) met expectations, dampening additional rate hike expectations.
- BOJ Governor Ueda’s comments on increasing bond purchases triggered yen selling.
- Outlook: Expecting a range-bound market around 150 yen, with potential support in the high 149 range.
GBP/USD (Pound/Dollar)
- Movement: Lacks direction ahead of BOE officials’ speeches.
- Factors:
- Strong UK employment and inflation data, but the BOE’s cautious stance is keeping gains limited.
- Outlook: Bearish bias for the pound. Dovish comments from BOE officials could accelerate the decline.
Today’s Key Events
| Time (JST) | Event | Impacted Currency |
|---|---|---|
| 18:00 | German Ifo Business Climate Index (Feb) | Euro (EUR) |
| 23:00 | US-French Summit | US Dollar (USD), Euro (EUR) |
| 01:00 | BOE “The Future of Central Bank Balance Sheets” Meeting | Pound (GBP) |
| 03:00 | US 2-Year Bond Auction ($69 Billion) | US Dollar (USD) |
Trading Strategies
1. EUR/USD: Bearish Bias
- Entry Point: Around 1.0550
- Target: 1.0480
- Stop Loss: 1.0580
2. USD/JPY: Buy on Dips
- Entry Point: 150.00-150.20
- Target: 151.00
- Stop Loss: 149.50
3. GBP/USD: Range Trading
- Sell Entry: 1.2150
- Target: 1.2080
- Stop Loss: 1.2180
Summary
- US Dollar: Watch for volatility around the US-French summit and Ukraine developments.
- Euro: Political uncertainty and economic data likely to keep selling pressure intact.
- Pound: Potential downside if BOE officials strike a dovish tone.
- Yen: Interest rate developments remain crucial; short-term yen selling may continue.
📈 With fewer significant events on the calendar today, cautious entries are recommended. The euro remains the primary focus with a bearish outlook. We’ll aim to follow the trend if market moves gain momentum!
