Asian Stocks have resumed their downfall after taking over from a Rollercoaster ride in Wall Street which saw US stocks post a dramatic reversal of losses and nearly close in Green area.  It was one of the most volatile sessions in years which at one point saw Dow Jones losing over 500 points and reversed in an almost 1000 point swing, backed by a rebound in oil prices which by the way posted (surprise surprise) a new low. 

In currency markets, the action was relatively muted however big swings were also noticeable. EURUSD once again tested its topside barrier at 1.0970 as stocks dropped however it fell below 1.09 as the reversal started to take place. GBPUSD spent most of the day trading within a 90 pip range between 1.4220 and 1.4130 while USDJPY recovered to 117.45 overnight after hitting 116.00 lows yesterday. USDCAD price action was the most volatile as the USDCAD initially lost 160 pips after BOC held rates unchanged but bounced back 100 points almost instantaneously. The pair then ended the day 200 points lower again as the oil drop intensified. 

AUD/USD managed to hold above 0.6830 support and rallied together with the other commodity currencies into the NY close. It reached 0.6955 ahead of the Tokyo open, but ran out of momentum and eventually fell back to 0.6890. 

Standing out in the calendar today is the ECB Rate Decision and Press Conference. ECB president Mario Draghi may show some concerns over further decline in oil price and the effect on inflation expectations. With that in mind, Draghi might signal that ECB is open and ready for further stimulus this year but that would be dependent on new economic forecasts to be published in March. In other words, there isn’t much expectation for today’s event.  

Trading quote of the day: 

We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.  – Warren Buffett

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