We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Gold
Bullish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Bearish
More View more
Real Time News
  • The spread of #coronavirus promises a global economic hit at a time when the global economy is perhaps especially ill-equipped to deal with one. Growth-correlated assets are vulnerable. Get your market update from @DavidCottleFX here: https://t.co/0If0Jw7c2P https://t.co/mph6z70XeF
  • The $JPY continues to struggle against the US Dollar but there seems little appetite to push USD/JPY much beyond a range which has tended to reassert itself since late last year. Get your market update from @DavidCottleFX here: https://t.co/iaVfPSuXy4 https://t.co/1QPhJmYlQv
  • The #Euro may bounce after hitting the lowest level in close to three years against the US Dollar. While the broader trend points firmly lower, selling pressure may be ebbing. Get your market update from @IlyaSpivak here: https://t.co/697SQ9j5FY https://t.co/6SEvwQyod8
  • GBP/CAD has broken below the September uptrend while EUR/CAD may be ending its consecutive 12 day decline with EUR/CHF approaching key resistance as NZD/CAD aims at November lows. Get your currencies update from @ZabelinDimitri here: https://t.co/GpRB7IKhTA https://t.co/hlHlGdhkHc
  • The $GBP recoiled from chart resistance against the US Dollar, setting the stage for prices to resume a bearish trend reversal triggered mid-January. Get your market update from @IlyaSpivak here:https://t.co/lVpyZkIfJt https://t.co/9oXusxs0Kg
  • The #Euro may have more room to fall versus its major peers such as the US Dollar, Japanese Yen and British Pound. What is the technical picture of EUR/USD, EUR/JPY and EUR/GBP? Get your market update from @ddubrovskyFX here: https://t.co/M6fLA9g3BK https://t.co/HMwQgr1WP5
  • The $USD’s aggressive rise versus ASEAN currencies such as the Singapore Dollar, Indonesian Rupiah, Malaysian Ringgit and Philippine Peso prolonged. What is the technical road ahead? Find out from @ddubrovskyFX here:https://t.co/RsFptNzODf https://t.co/u8meQUSsVG
  • $AUD broke critical range support against its US counterpart, suggesting deeper losses are ahead even after prices hit an 11-year low. Get your market update from @IlyaSpivak here:https://t.co/45YpJRjDYj https://t.co/zWAzaL78Sc
  • After negotiating a series of economic and geopolitical risks in 2019, the S&P 500 rounded out the year more than 30% higher. Will the stock market crash in 2020? Find out from @PeterHanksFX here: https://t.co/8KsjB9YkBB https://t.co/4ph9bdMxz9
  • Italy reports first death from coronavirus - BBG
Euro Traders Beware: EUR Price Volatility & ECB Rate Decisions

Euro Traders Beware: EUR Price Volatility & ECB Rate Decisions

2019-10-23 18:30:00
Rich Dvorak, Junior Analyst
Share:

EURO PRICE VOLATILITY HEIGHTENED AROUND ECB MEETINGS

  • EURUSD, EURJPY, EURGBP, EURAUD, EURCAD and EURCHF tend to experience heightened volatility around European Central Bank (ECB) meetings
  • Euro price action surrounding high-impact event risk like ECB rate decisions warrants extra prudence by forex traders
  • Check out the IG Client Sentiment Report for real-time insight on EUR forex trader positioning

Larger than normal gyrations in spot EUR prices around ECB monetary policy updates should be expected by forex traders according to data pulled on major Euro currency pairs from January 2013 to September 2019. A statistical analysis on Euro price action over the 24-hours before and after the release of ECB rate decisions reveals that EURUSD, EURJPY, EURGBP, EURAUD, EURCAD and EURCHF tend to experience sizable swings in performance when compared to non-ECB meeting trading days. Though mouthwatering for volatility fiends, relatively elevated measures of volatility is broadly indicative the level of risk is running above average.

Take a look at the DailyFX Central Bank Calendarfor scheduled ECB meetings and upcoming interest rate decisions from other major central banks.

EURO PRICE VOLATILITY AROUND ECB MEETINGS

Euro Volatility Around ECB Rate Decisions EURUSD, EURJPY, EURGBP, EURAUD, EURCAD, EURCHF

The table above shows the absolute value (i.e. +/-) median change in spot EUR prices surrounding an ECB meeting, which is compared to non-ECB meeting trading days where “T” is the time that an ECB rate decision crosses the wires, “T - 1” the 24-hours prior and “T + 1” the 24-hours following the central bank’s monetary policy update.

Conclusions are the same regardless of how the data is sliced-and-diced to encompass Euro price action in the runup to and aftermath of an ECB rate decision: the central bank’s monetary policy updates broadly propels currency volatility. Alas, forex traders should thoroughly consider implementing stringent risk management techniques when trading the Euro around an ECB meeting – like placing tighter stops or trading smaller position sizes.

EUR/USD PRICE VOLATILITY AROUND ECB MEETINGS

EURUSD Price Chart Euro Volatility Around ECB Meetings

Spot EURUSD typically fluctuates +/- 43 pips on a given day, which compares to the average +/- 47 pips the day prior and average +/- 85 pips the day following an ECB meeting.

EUR/JPY PRICE VOLATILITY AROUND ECB MEETINGS

Euro Traders Beware: EUR Price Volatility & ECB Rate Decisions

Spot EURJPY typically fluctuates +/- 55 pips on a given day, which compares to the average +/- 59 pips the day prior and average +/- 101 pips the day following an ECB meeting.

EUR/GBP PRICE VOLATILITY AROUND ECB MEETINGS

Euro Traders Beware: EUR Price Volatility & ECB Rate Decisions

Spot EURGBP typically fluctuates +/- 31 pips on a given day, which compares to the average +/- 29 pips the day prior and average +/- 37 pips the day following an ECB meeting.

EUR/AUD PRICE VOLATILITY AROUND ECB MEETINGS

Euro Traders Beware: EUR Price Volatility & ECB Rate Decisions

Spot EURAUD typically fluctuates +/- 64 pips on a given day, which compares to the average +/- 62 pips the day prior and average +/- 94 pips the day following an ECB meeting.

EUR/CAD PRICE VOLATILITY AROUND ECB MEETINGS

Euro Traders Beware: EUR Price Volatility & ECB Rate Decisions

Spot EURCAD typically fluctuates +/- 58 pips on a given day, which compares to the average +/- 72 pips the day prior and average +/- 107 pips the day following an ECB meeting.

EUR/CHF PRICE VOLATILITY AROUND ECB MEETINGS

Euro Traders Beware: EUR Price Volatility & ECB Rate Decisions

Spot EURCHF typically fluctuates +/- 26 pips on a given day, which compares to the average +/- 19 pips the day prior and average +/- 29 pips the day following an ECB meeting.

FOREX TRADING RESOURCES

-- Written by Rich Dvorak, Junior Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.