RBA Holds Rates Steady At Today’s Meeting

The US dollar posted strong gains amid a risk on sentiment which saw the safe-haven assets losing ground. Meanwhile, commodities such as gold and silver extended strong declines on the day.

Economic data was relatively quiet on Monday. Eurozone Sentix investor confidence improved, with the index rising to -2.2, beating estimates of -3.1. In the UK, construction PMI fell to 49.5, marking a contraction in the sector.

The NY trading session saw the release of construction spending which posted a decline of 0.6%. This was worse than the forecast of 0.2% and dropped from 0.8% in the month before.

The Reserve Bank of Australia held its monetary policy meeting earlier today. As widely expected, the central bank left interest rates unchanged at 1.50%. The decision to leave rates unchanged comes ahead of key economic reports due later during the week.

The European trading session will kick off today with IHS Markit releasing the monthly services PMI reports. Expectations are for the eurozone services PMI to remain steady at 52.3, but we can expect the Italian and French services sectors to post a contraction.

As for the UK’s services PMI, expectations are for a decline to the 50.0 level on the index. This marks a modest drop in activity from 50.1 in January. Forecasts indicate that retail sales for the eurozone may show an increase of 1.3% after they fell 1.6% in the month before.

The NY trading session will see the release of ISM’s services PMI report. The non-manufacturing activity is expected to rise to 57.4 in February, up from 56.7 in January. Later in the day, the BoE governor, Mark Carney is scheduled to speak.

EUR/USD Intraday Analysis

eurusd

 

EUR/USD (1.1328): The EURUSD currency closed on a bearish note yesterday following the previous two days of consolidation. Price is back near the support level of the 1.1327 region. With the support being tested once again, there is scope for further downside. A break down below 1.1327 – 1.1309 could signal further losses that could send the euro currency lower to the 1.1256 level of support. In the longer term, the EURUSD remains range bound.

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