Today, the main event of the week is the decision of the ECB on monetary policy. The decision will be announced at 12.45 London time, and at 13.30 the speech of the ECB head Draghi will begin.
Interest rates of the ECB will most likely not change. The main rate will remain at the minimum level of 0%, deposit for banks minus 0.4% (this rate could be shifted to zero).
The main question is whether the ECB or Draghi will say in some way about the completion of a huge program of injecting liquidity into the markets.
Investors are almost 100% sure that such a turn of the ECB will be announced today, about the completion of the QE program or at least about the time of such completion.
Actually, the growth of EUR / USD, which continues from the beginning of the year and was + 10% to the dollar, is caused precisely by this expectation of a turn.
At the same time, there are risks for euro-bulls. Firstly, the ECB and Draghi do not want to see a new sharp rise in the euro exchange rate anywhere by 1.2000. This is bad for the euro area economy.
On the other hand, the growth of EUR / USD requires a significant correction, which will inevitably occur at some point (of course, this could be from the level of 1.2000, for example).
According to the Chicago Stock Exchange, the net long-term euro has peaked in three years.
In general, the upward trend for the euro remains but the levels are such that purchases without stops are extremely risky.
The key level is at the top of 1.1580, there is no down right level yet.
The material has been provided by InstaForex Company – www.instaforex.com Source: Instaforex.com
ECB: 12.45 and 13.30 BST
Morning review.
Today, the main event of the week is the decision of the ECB on monetary policy. The decision will be announced at 12.45 London time, and at 13.30 the speech of the ECB head Draghi will begin.
Interest rates of the ECB will most likely not change. The main rate will remain at the minimum level of 0%, deposit for banks minus 0.4% (this rate could be shifted to zero).
The main question is whether the ECB or Draghi will say in some way about the completion of a huge program of injecting liquidity into the markets.
Investors are almost 100% sure that such a turn of the ECB will be announced today, about the completion of the QE program or at least about the time of such completion.
Actually, the growth of EUR / USD, which continues from the beginning of the year and was + 10% to the dollar, is caused precisely by this expectation of a turn.
At the same time, there are risks for euro-bulls. Firstly, the ECB and Draghi do not want to see a new sharp rise in the euro exchange rate anywhere by 1.2000. This is bad for the euro area economy.
On the other hand, the growth of EUR / USD requires a significant correction, which will inevitably occur at some point (of course, this could be from the level of 1.2000, for example).
According to the Chicago Stock Exchange, the net long-term euro has peaked in three years.
In general, the upward trend for the euro remains but the levels are such that purchases without stops are extremely risky.
The key level is at the top of 1.1580, there is no down right level yet.
The material has been provided by InstaForex Company – www.instaforex.com
Source: Instaforex.com