We are watching the ECB (April 15th) this week to get a sense of whether this can be an event that supports the thesis that the Dollar can remain a bit weaker before it goes much stronger.
While we expect no major surprises we will get a medium term outlook for the economy. Watch the Q&A for clues on how they are leaning.
By clearly looking at the charts we are waking up Monday morning with a key level for all the related Dollar trades, Emerging Markets (EEM, quote), Commodities, Emerging Market Currencies, Recourses, and Commodity Currencies.
The ECB has already achieved mild success with QE. The ECB may even have to address sooner than later whether they could ease off the QE lever before September of 2016
Any reference to an improved economy will put upward pressure on the Euro
We also feel that oil prices forced the ECB’s hand in early January thus if you are like us and feel oil prices have bottomed, the deflationary effects of this impact are easing off the pressure to act more
Today commodities are higher along with the USD. This is third straight day of this pattern which also tells us that markets want to break the pattern of the Dollar.