Euro jumps as ECB holds unscheduled meeting, dollar awaits Fed move

Euro jumps as ECB holds unscheduled meeting, dollar awaits Fed move

euro

AUDUSD is trading up 1.14% at 0.6947

The euro jumped after the European Central Bank’s governing council said it would hold an unscheduled meeting on Wednesday to discuss the recent sell-off in government bond markets, hours ahead of a closely-watched meeting of the U.S Federal Reserve.

The European common currency rose as to as high as $1.0508 following the announcement, which comes after the spread between government bond yields from Germany and more indebted southern nations, particularly Italy, soared to more than two-year highs.

Italy’s 10-year bond yield slid 22 basis points (bps) to 4.0% after the announcement, down from eight-year highs. It was set for its biggest daily fall since March 1.

The Italian-German 10-year yield spread tightened by around 20 bps.

The meeting started at 0900 GMT and is likely to be followed by an early afternoon statement, people with direct knowledge said.

The Australian dollar, often seen as a proxy for risk appetite, was at $0.6935, rising 1% from the previous day’s one-month low.

The Aussie is down 7.3% so far this quarter, which would be its worst quarter since the first three months of 2020 when the COVID-19 pandemic hit.

On technical fronts AUDUSD RSI stood at 28.81 and currently it is trading below all MA. So, SELL position can be taken with following target and stoploss:

TRADE SIGNAL – : AUDUSD – SELL: 0.6945, TARGET: 0.6906, STOP LOSS : 0.6966

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