Markets have faced a choppy day as fears about global economic growth persist.

Regarding the FX market, all eyes were turned on the single currency as ECB’s Mario Draghi delivered its monthly speech in Frankfurt.

The Euro tanks below 1.0800 mark after Draghi said that the ECB is ready to take action in March as global risks escalate.

In addition, the British pound fell to as low as a 1.4080 level before to recover strongly from this 7-year low, while the loonie jumped from 13-year trough sending USD/CAD lower by -1.50% during the U.S trading session.

Earlier in Asia, Hang Seng index closed lower by -1.82% while the Nikkei retreated by -2.43%. In an effort to stop the current sell-off in the Chinese equity market, China vice president vows to look after stock market investors.

In the other side, U.S stocks rally surprisingly, led by energy shares amid stimulus prospects. The Standard & Poor’s 500 Index recovered from 21-month low. The Dow Jones Industrial average gained 1.5% while the NASDAQ advanced by 1.3%.

In the meantime, the Japanese Yen weakened today and we have seen USD/JPY breaking above 117.00 level as risk appetite resumed.

Technically, and beginning with the EUR/USD , the pair was trading inside a 200pips range between 1.1000 and 1.0800 levels. Following ECB press conference, bears managed to push prices lower below 1.0800 psychological support before to find a low around 1.0775 level.

Few hours later, the Euro bounced strongly and stabilized around 1.0840 level as bulls succeeded to erase half the losses seen after Draghi’s dovish comment.

Consequently, our view remain neutral in this pair and as far as prices does not close below this support, we expect the pair to keep trading sideways during the next days.

Near-term resistance stands at 1.0860 level, followed by 1.0920 zone.

Regarding the Sterling, we believe that the pair is likely to begin a short-term correction as bearish momentum began to lose momentum. The bearish pivot is located at 1.4340 level and as far as prices keep trading below this peak; downside pressure is likely to remain intact.

Finally, USD/CAD has ended a bullish cycle near 1.4700 psychological as Oil gained more than 4% today. The pair fell to as low as 1.4225 level, which stands near the 50% Fibonacci retracement of the recent rally from 1.3810 low. Hence, we expect buyers to appear around 1.4250-1.4145 zone as the main trend remain clearly bullish.

 

 

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