Trade Setups in EUR/AUD, EUR/USD, EUR/GBP Ahead of ECB
- EURUSD holding swing lows from October.
- EURAUD inverse H&S might be most appealing long.
The European Central Bank wraps up its November policy meeting today against an interesting backdrop: possible mutiny rooted in the German-led, Northern creditor bloc. Reports emerged on Tuesday that up to 10 board members were displeased with President Mario Draghi's recent attempts to soothe public concern by hanging the carrot of new iterations of QE in the future.
While something extreme happening today like Germany's Jens Weidmann or President Draghi resigning over the latest tiff would change the balance of power within the ECB between doves and hawks very, very quickly, it's important not to approach today's ECB meeting with a trading plan based on expected fundamental outcomes; the only approach to the market is by examining the charts. Price pays, opinions don't.
That being said, the chances of QE at today's ECB meeting, irrespective of German and Northern opposition to a Fed-styled sovereign QE, were limited to begin with. The ECB's latest measures, the TLTROs and ABS-program have not yet been afforded sufficient time to have a material impact on the Euro-Zone economy.
--- Written by Christopher Vecchio, Currency Strategist
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