ECB: Villeroy Stresses That Inflation Risks Are To Downside
Early post December meeting ECB speak coming from Villeroy, speaking to Le Figaro. A reminder that Villeroy is one of the more dovish members of the Governing Council, and has previously suggested he views inflation risks as to the downside.
- "*ECB'S VILLEROY: INFLATION RISKS ARE PARTICULARLY TO DOWNSIDE" " bbg
On the exchange rate:
- "*VILLEROY: ECB WOULD BE AGILE IF NEEDED TO ADJUST TO STRONG EURO" bbg
- "*VILLEROY: CURRENT EURO LEVEL IS CLOSE TO 25-YEAR AVERAGE"
- A reminder at yesterday's press conference, President Lagarde noted that "We do not target the exchange rate. It’s in the risk section of our statement. It’s something we look at carefully, how currencies are positioned around the world. We pay attention to the position against the RMB as one of those."
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BTP TECHS: (Z5) Corrective Phase Still In Play
- RES 4: 123.14 1.764 proj of the Sep 3 - 11 - 25 price swing
- RES 3: 122.81 1.618 proj of the Sep 3 - 11 - 25 price swing
- RES 2: 122.53 1.500 proj of the Sep 3 - 11 - 25 price swing
- RES 1: 121.94 High Oct 17 / 22 and the bull trigger
- PRICE: 120.76 @ Close Nov 18
- SUP 1: 120.53 Low Nov 14
- SUP 2: 120.15 50.0% retracement of the Sep 3 - Oct 17 bull leg
- SUP 3: 119.73 61.8% retracement of the Sep 3 - Oct 17 bull leg
- SUP 4: 119.07 Low Sep 25
The trend set-up in BTP futures is bullish and the latest pullback appears corrective. However, the contract has breached support at 120.74, the Aug 5 high, and pierced the 50-day EMA, at 120.76. A continuation lower would highlight potential for a deeper correction and expose 120.15, a Fibonacci retracement. Key resistance and the bull trigger has been defined at 121.94, the Oct 17 high. A break of this hurdle would resume the uptrend.
USDJPY TECHS: Trend Needle Points North
- RES 4: 156.58 2.236 projection of the Sep 17 - 26 - Oct 1 price swing
- RES 3: 156.00 Round number resistance
- RES 2: 155.89 High Feb 3
- RES 1: 155.73 High Nov 18
- PRICE: 155.49 @ 07:06 GMT Nov 19
- SUP 1: 153.68 20-day EMA
- SUP 2: 152.82 Low Nov 7
- SUP 3: 151.74 50-day EMA
- SUP 4: 150.47 Low Oct 21
A fresh cycle high in USDJPY yesterday confirms once again a resumption of the uptrend and an extension of recent gains. Note that moving average studies remain in a bull-mode position, this continues to highlight a dominant uptrend. Sights are on the 156.00 handle next. Initial firm support to watch is 153.68, the 20-day EMA. A clear breach of the average would signal scope for a corrective pullback.
UK DATA: Services lower (but air fares soft); food softer than BOE above cons
- Headline CPI only 4 hundredths below BOE forecast with a weak 3.6%Y/Y rounded print (3.56% unrounded).
- Services was a tenth lower than the BOE forecast but note that air fares were only 1.68%M/M - that's at the bottom end of expectations which ranged from around flat to as high as 20-25%M/M.
- Food prices higher than consensus expected but lower than the BOE forecast.
