So far today, the big driver has been the European Central Bank rate decision. After an initial statement that said the bank would ‘significantly’ increase bond buys in the coming months, a muddled message around inflation expectations left many scratching their heads. This was somewhat apparent in the currency as well, as an initial sell-off quickly found support before prices ran right back into a key zone of resistance around the psychological level of 1.2000.
EURUSD at this point, may be one of the few major pairs holding some attraction for long-USD themes. The pair is currently displaying a potential bear flag formation with prices at resistance. But, as noted above, USD-weakness could come back very quickly considering the FOMC event on the calendar for next week, so if the bear flag is nullified, the long side of the pair could become attractive again, with aim towards a revisit of the prior resistance zone running from 1.2133-1.2167.
Today on the news front in Europe we have the Italian Quarterly Unemployment Rate and the EU monthly Industrial Production. In the US investors will be watching the Producer Price Index (PPI) and the Preliminary UoM Consumer Sentiment and inflation expectations.
Warning:
Trading on CFDs involves a high level of risk, including full loss of your trading funds. Before proceeding to trade, you must understand all risks involved and acknowledge your trading limits, bearing in mind the level of awareness in the financial markets, trading experience, economic capabilities and other aspects.
Disclaimer:
Market Trends, Charts, Trading Ideas or other information provided by BKFX (Pty) Ltd and/or third parties are not intended as an investment advice and/or recommendation. The information provided is not presented as suitable or based on your specific need. You are responsible for your own investment decisions and you should not trade with money you cannot afford to lose. Any views or opinions presented in this Article are solely those of the author and do not necessarily represent those of the Company, unless otherwise specifically stated. The Company may provide the general commentary which is not intended as an investment advice and must not be construed as such. Seek advice from a separate financial advisor if an investment advice is needed. The Company assumes no liability for errors, inaccuracies or omissions, inaccuracies or incompleteness of information, texts, graphics, links or other items contained within this article/material.