It will be an important day for the euro as the ECB concludes its first monetary policy meeting of the year. While the bank is not expected to raise interest rates, investors will be paying close attention to the forward guidance. Most importantly, they will want clarity on when the bank expects to raise interest rates. Last year, the bank said that a rate hike could come ‘through summer’. Therefore, investors will want clarity on this keeping in mind that the ECB has talked about the weakening EU economy. Other than the interest rates decision, investors will receive important manufacturing data from the EU.

The price of crude oil declined sharply after API released its inventory numbers. In the past week, the crude stocks in the United States rose by 6.55 million barrels. This was the first rise in inventories this year and was much higher than last week’s drawdown of more than 560K barrels. Traders will now focus on the data from the EIA, which is expected to show a drawdown of 42K barrels. Another important news event came from the US where Donald Trump is expected to recognize the head of Venezuela’s opposition party as the president. This is an important development because Venezuela has the biggest oil reserves in the world.

AUD/USD

The Australian dollar weakened despite positive jobs numbers. It reached an intraday low of 0.7120 from a high of 0.7170. On the hourly chart, the current price is below the short and medium-term moving averages. The force index has declined to the neutral rate, while the RSI seems headed to the oversold level. The price is also along the lower band of the Bollinger Bands. There is a likelihood that the downward momentum will continue today.

EUR/USD

The EUR/USD pair was little moved in the Asian session as traders waited to see the action of the ECB. As of writing, the pair was trading at the 1.1387 level. The pair has consolidated along these levels this week, which means that a major breakout could happen today. A dovish ECB could take the pair to below the 1.1340 level while a hawkish ECB will possibly take it above the 1.1450 level.

XTI/USD

The price of crude oil declined sharply in overnight trading after the release of inventory numbers. The XTI/USD pair declined to a low of 51.80 after reaching a high of 53.77 yesterday. On the hourly chart, the pair is below the 42 and 21-day moving averages, while the Relative Strength Index (RSI) is relatively unchanged at the 42 level. Today, traders will focus on the official data from the EIA. Signs that US companies are increasing production could take the pair much lower.