Both central banks raised their benchmark rates by another 0.5% as expected, but the Bank of England softened its messaging, whereas its European peer remained aggressive, despite some less hawkish elements

The ECB hiked rates by 50bps today, maintaining that another 50bps is coming in March. However, the press conference delivered by president Lagarde proved to be confusing. Besides, obscure phrases like “continuity in a steady state”, she pointed to data dependency and a “meeting by meeting” approach. This suggests the 50bps in March is not a done deal. The market interpreted the press conference as dovish and the EURUSD sold…

The Fed hiked rates by 25 bps yesterday. However, the Fed chair, perhaps mistakenly, loosened markets when he stated, “If we feel like we’ve gone too far, and inflation is coming down faster than we expect, then we have tools that would work on that.” The press conference offered little pushback against current market thinking. This caused risk assets to rally, and money to rotate out of safety, e.g., FXCM’s…

The pair covers most of the losses from the increase in New Zealand’s unemployment and lacks firms direction, as markets gear up for the monetary policy decision by the US Fed

USDOLLAR showed resilience over the last few trading sessions. Yesterday showed a crack. There is a risk of heightened dollar volatility.

Heading towards the Fed release on Wednesday a sense of caution prevails. Despite the market looking for a pivot, the Fed has maintained an aggressive stance.

The pair is on the back foot ahead of the monetary policy decisions by the US Fed and the European Central Bank, despite expectations for a more aggressive move by the ECB

The BoC raised its overnight rate by 25bps to 4.5%. This was as expected and is regarded as the current cycle’s peak. The statement read that the central bank “expects to hold the policy rate at its current level.”

GBPUSD daily is trading in its bullish channel between the upper blue and red bands. The hourly chart also shows signs of positivity. Its trend-following EMAs and momentum-based stochastic have crossed up (black ellipses). If the EMAs develop angle and separation and the stochastic makes its way to its upper quintile and holds (blue arrow), an underlying bullish momentum will be present.

The pair showed signs of life as the BoJ did not build on December’s policy surprise, but the technical death cross and market optimism for a Fed pivot weigh on the greenback