Post-ECB, look for EUR/USD to magnetize toward the 1.1500 handle

Forex markets

This latest pop in the dollar? It rings hollow as a chocolate Easter bunny. The overnight EURUSD dip felt more like a classic pre-event risk trim than anything fundamentally dollar-bullish. A small Empire State Survey beat? That’s not exactly a macro game-changer — more like a breather from the stagflation headlines.

Let’s be honest: the euro was overbought, technically extended, and begging for a pullback. So we got one. But I’m still eyeing the ECB as the true catalyst here — and once we’re through that event risk, I think EUR/USD is clear to rocket back toward 1.15. This is a textbook setup: markets freeze into a high-stakes central bank event, then explode once the gap risk clears. Often the move that should’ve happened already just… happens.

Options markets are already flashing that signal — heavy downside skew on the dollar, not the euro. And the logic tracks. Even if U.S. markets have stabilized for now, the damage from tariff whiplash and policy-on-the-fly still lingers. U.S. data will roll over before long, and the idea that we’re out of the woods 6 months from now could be wishful thinking at best.

This euro rally isn’t about EU exceptionalism — not even close. It’s about the dollar losing its safe-haven lustre. In a high-volatility, dollar-fatigued world, EUR is just the biggest, cleanest pool for capital to rotate into. The only real speed bump would be an aggressively dovish ECB — but with 75 bps of cuts already priced, the bar to surprise is sky-high.

Bottom line: I’m not buying the dollar bounce. Still long EURUSD structurally, I’m back on the bid, a bit out of range, mind you, but ready to fade any post-meeting euro weakness hard or chase the rip.

Gold markets

This morning’s surge in gold had that unmistakable front-run flavor — classic move ahead of a headline cocktail. Gold pops as Beijing sets a weaker Yuan fix just before a “better-than-expected” China data drop, all while traders whisper this isn’t gonna end well, in reference to the US-China trade war. Yep, it’s textbook.

Call it what it is: storm clouds are gathering, and gold just got loaded as a hedge. This move isn’t just about data — it’s positioning ahead of what’s likely to morph into a “pick your side or pick your poision” moment across risk. The market smells confrontation at the policy level and is hedging accordingly.

Oil markets

Of course, oil’s reaction function couldn’t be more textbook opposite — even with the theoretical “risk-on” signal from China’s GDP beat, and crude is grinding lower like it’s got a date with $60 Brent again. Why? Because the market’s not buying the illusion of strength. Traders are looking past the surface print and zeroing in on the soft underbelly: bloated inventories, sluggish demand recovery, and a tariff war that’s morphing into a slow bleed for global trade flows.

And let’s not forget — with the U.S. effectively walling off China from key supply chains and China’s export machine stalling, the demand picture for oil looks anything but rosy. Add in a backdrop of rising OPEC+ output, Iranian barrels leaking through sanctions, and Russian supply defying pressure, and you’ve got a cocktail oil bears are more than happy to drink.

The tape in Asia might look fine, even stabilizing on the surface, but crude is trading like the macro is about to get punched in the gut.