Draghi and Carney likely to add Volatility to Euro GBP

Overnight data was slightly positive with stronger Japanese machinery orders and a positive headline number from the Australian labour report. The Australian unemployment rate dropped to 5.4% adding 10,400 jobs but the details were poor as the report revealed that the rise came from part time jobs with full time employment dropping by 9800.

The FX market has been in a holding pattern for the past 36 hours as we await the main events of the week in the form of Mark Carney’s testimony to the treasury committee and Mario’s Draghi’s press conference post the ECB meeting.

At 9.45am GMT the incoming BOE Governor is very likely to be asked to explain comments he made in Toronto in December where we was very vocal about tying monetary policy and unconventional easing to economic growth ‘in exceptional times’.

The questions and answers after the ECB statement is the main event today as ECB  President Draghi is likely to be pressed on the recent strength of the EUR following the Germany versus France war of words with the French saying the ECB needs an FX policy to halt the appreciation that is hurting French growth with the Germans countering such comments with ‘sensible for financial markets to determine exchange rates’.

This morning we see the latest industrial production numbers from Germany, Spain and the UK plus the trade balance from the new world cup favourites. The US data this afternoon comes in the form of weekly jobless claims.

EUR/USD

Supports 1.3500-1.3460-1.3425 | Resistance 1.3595-1.3625-1.3710

USD/JPY

Supports 93.30-93.10-92.60 | Resistance 94.15-94.85-95.00

GBP/USD

Supports 1.5630-1.5600-1.5550 | Resistance 1.5685-1.5715-1.5800