The EURUSD Stays Supported Pre ECB
- Forex traders prepare for an active economic event calendar this week.
- Key Benchmark Rates are expected to remain at .5%.
- Absent of any changes, the EURUSD is expected to continue trending.
This week is sizing up to be another big week for Forex news traders. With events such as the European central bank (ECB) rate decision on the economic calendar, it is important for traders to have an idea of the markets expectations and how it can affect price.
To get prepared for the event let’s take a closer look at the ECB rate decision!
Learn Forex: ECB Benchmark Rate
The ECB rate decision is set to be released on Thursday the 7th, at 12:45 GMT. Controlling interest rates is one of the key monetary tools the ECB has at its disposal to influence the Euro Zone economy. Over the past two years, you can see these key interest rates steadily declining as the ECB has worked to spur the economy. The goal has been to free up capital by making borrowing more accessible to businesses. It is worth noting that rates have been at a record low.5% now for 7 months, as seen in the graph above.
Analysts believe that interest rates are to remain the same, holding at .5%. So with rates potentially set to remain unchanged, let’s look at what can traders expect from price.
(Created using FXCM’s Marketscope 2.0 charts)
Trade the Trend
Outstanding any fundamental changes from this week’s news events, traders will reasonably to expect the current EURUSD trend to continue. Price has been defined by a rising price channel supported by the standing July and August lows. As long as price remains supported, traders will look for opportunities to buy the EURUSD up towards channel resistance near 1.3900.
An alternative scenario would occur in the event that price breaks below the supported price channel. If the price of the EURUSD moves under 1.3440, traders may then look to sell the pair towards lower lows.
---Written by Walker England, Trading Instructor
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