Good evening team,
Finally a couple of solid wins on the board. We are back revisiting the EURUSD leading into the ECB interest rate decision, statement and press conference. Now, expectations are that everything will remain on hold, however, traders are looking for clues in the language used in the press conference and statement.
- The European Central Bank’s new inflation target and its possible effects on monetary policy will be the key topic of this week’s meeting in Frankfurt.
- The ECB hiked its inflation target from “below but close to 2%” to a symmetric 2% target over the medium term, which would allow consumer prices to overshoot when deemed necessary.
- While some expect more than just tweaks in the ECB’s forward guidance this week, others expect a real sea change to come later this year once there is more clarity about the region’s economic trajectory.
- A number of central banks have already begun discussing bond tapering due to the surge in inflation over recent months. This leads us to believe the ECB could shoot next.
From a technical perspective, the DXY has a number of bearish signals, please check the DXY technical analysis tab. Most USD pairings look good for a short USD bias.
EURUSD – Daily Charts
MACD cross over paired with a bullish divergence on the RSI, very strong bullish signals. There is also a number of support zones coming into pay at 1.1748.
EURUSD 1 Hour Chart
Trade Setup: BUY Market execution, current price 1.1795, stop loss 1.1718 and take profit target 1.1950.
Stop loss: 77 pips
Take profit: 155 pips