The Euro (EUR) inched lower against the US Dollar (USD) on Thursday, decreasing the price of EUR/USD to less than 1.0950 ahead of the ECB monetary policy announcement which is considered a key gauge for current economic conditions.
The technical bias remains bullish because of a higher high in the recent upside wave.
Technical Analysis
As of this writing, the pair is being traded around 1.0904. A hurdle may be noted near 1.0916, an immediate trendline resistance ahead of 1.0950, the high of the last major upside move and then 1.1000, a major psychological number on all timeframes. A break and hourly closing above the 1.1000 resistance shall incite renewed buying interest, validating a move towards the 1.1065 resistance which is another major horizontal resistance area.
On the downside, a support may be seen near 1.0885, the confluence of two trendlines as demonstrated in the given above hourly chart with black and red colors ahead of 1.0815, the confluence of 50% fib level as well as lower trendline and then 1.0681, the low of the last major downside move. The technical bias shall remain bullish as long as the 1.0681 support zone is intact.
How EUR/USD Reacted on ECB Monetary Policies in Past?
EUR/USD didn’t show any noticeable volatility after the release of last few ECB monetary policies as the central bank kept the benchmark interest rate as well as deposit rate unchanged at 0% and -0.4% respectively.
How to Trade Today’s Interest Rate Decision?
- Buying the EURUSD put options near current levels can be a good strategy if the ECB unexpectedly reduces its interest/deposit rate.
- Alternatively, buying the EURUSD call options may be a good move if the ECB unexpectedly increases its interest/deposit rate.
What Assets to Trade?
In addition to EUR/USD, trading EUR/GBP, EUR/AUD, EURJPY and EURCAD can also be a good move as the aforementioned pairs are highly reactive to the ECB monetary policy announcement.
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