News & Analysis at your fingertips.

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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bearish
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
Wall Street
Bearish
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
Gold
Bearish
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
Bearish
More View more
Real Time News
  • The final ‘full’ week of the year brings about the last wave of significant event risk from around the globe, including three central bank rate decisions (Fed, BOE, & BOJ). Get your market update from @CVecchioFX here:https://t.co/PhqxSPlngI https://t.co/XX57vSjQwV
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/HOvzuOICQx
  • Ever wonder if there are other chart types that can be sued for technical analysis? HLOC charts are discussed in the following article as well as their pros and cons. Learn more here: https://t.co/qV3c7a4YR3 https://t.co/32hYzqhuZ9
  • The Australian Dollar sits on the crossroads of Treasury yields, the S&P 500 and US fiscal stimulus expectations. Will $AUDUSD gains slow? Chinese Q4 GDP and Australian jobs data are due. Get your market update from @ddubrovskyFX here: https://t.co/BsYmmWFYOH https://t.co/HhLqb2iVgk
  • #Gold prices have come under significant pressure to kick-off 2021. However, the formation of bullish technical patterns across multiple timeframes suggests that a rebound higher may be at hand. Get your market update from @DanielGMoss here: https://t.co/Dpf8N4Fh0T https://t.co/pnZpnM9yT5
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Learn about the importance of the ISM manufacturing index here: https://t.co/Xr3xtoFpZy https://t.co/yCtLFemdNc
  • GBP underpinned as BoE downplays negative rates, alongside vaccine rollout. Get your market update from @JMcQueenFX here: https://t.co/n6V6uw0XV5 https://t.co/Toq2fxSdBE
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/5VzSt5Ak7R
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/Jkv0onMyZw
  • Why is JPY called a safe haven? What are some factors in its favor this quarter? Get your free forecast here: https://t.co/mzeJ5x73N3 #DailyFXGuides https://t.co/S4bwgGZxmw
EURUSD- Trading the European Central Bank (ECB) Rate Decision

EURUSD- Trading the European Central Bank (ECB) Rate Decision

2013-08-01 08:00:00
David Song, Strategist

Trading the News: European Central Bank Interest Rate Decision

What’s Expected:

Time of release: 08/01/2013 11:45 GMT, 7:45 EDT

Primary Pair Impact: EURUSD

Expected: 0.50%

Previous: 0.50%

DailyFX Forecast: 0.50%

Why Is This Event Important:

The European Central Bank (ECB) interest rate decision may weigh on the single currency as the Governing Council adopts forward-guidance for monetary policy, but the fresh batch of central bank rhetoric may drag on the single currency should President Mario Draghi show a greater willingness to further embark on the easing cycle. As the euro-area remains mired in recession, the ECB may allude to additional rate cuts down the road, and Mr. Draghi may sounds more dovish this time around as the outlook for growth and inflation remains weak.

Recent Economic Developments

The Upside/Bullish Scenario

Release

Expected

Actual

Euro-Zone Economic Confidence (JUL)

92.5

92.5

Euro-Zone Purchasing Manager Index Composite (JUL A)

49.1

50.4

Euro-Zone Retail Sales (MoM) (MAY)

0.3%

1.0%

The ECB may continue to call for a recovery later this year as confidence in the euro-area picks up, and a more neutral policy statement may set the tone for a short-term rally in the EURUSD as market participants scale back bets for more central bank support.

The Downside/Bearish Scenario

Release

Expected

Actual

Euro-Zone Unemployment Rate (JUN)

12.2%

12.1%

Euro-Zone Consumer Price Index Core (YoY) (JUL A)

1.2%

1.1%

Euro-Zone Trade Balance s.a. (MAY)

16.2B

14.6B

As the ECB looks for an export-led recovery, the ECB may look to limit the upside in the single currency, and we may see the Euro struggle to hold its ground should the Governing Council may show a greater willingness to implement more non-standard measures.

Potential Price Targets For The Rate Decision

Forex_EURUSD-_Trading_the_European_Central_Bank_ECB_Rate_Decision_body_ScreenShot220.png, EURUSD- Trading the European Central Bank (ECB) Rate Decision

As the EURUSD struggles to clear the 61.8% Fibonacci retracement from the February decline (1.3340), the pair looks poised to consolidate ahead of the ECB interest rate decision, but we may see a run at the June high (1.3415) should President Draghi strike a more upbeat tone for the monetary union. However, should the central bank show a greater willingness to embark on its easing cycle, the EURUSD may struggle to maintain the rebound from July (1.2754), and the single currency may work its way back towards the 23.6% retracement (1.2640-50) over the near to medium-term as market participants increase bets for additional monetary support.

How To Trade This Event Risk

Trading the given event risk may not be as clear cut as some of our previous trades as the Governing Council is widely expected to retain its current policy, but the fresh batch of central bank rhetoric may set the stage for a long Euro trade should the ECB sound more upbeat this time around. Therefore, if President Draghi strikes an improved outlook and adopts a more neutral tone for monetary policy, we will need a green, five-minute candle following the statement to generate a long entry on two-lots of EURUSD. Once these conditions are met, we will set the initial stop at the nearby swing low or a reasonable distance from the entry, and this risk will establish our first target. The second objective will be based on discretion, and we will move the stop on the second lot to cost once the first trade hits its mark in an effort to protect our profits.

On the other hand, the Governing Council may turn increasingly cautious towards the economy as the region struggles to return to growth, and the ECB may show a greater willingness to ease policy further in order to pull the region out of recession. As a result, if Mr. Draghi surprises with a rate cut or talks up bets for additional monetary support, we will implement the same strategy for a short euro-dollar trade as the long position laid out above, but in the opposite direction.

Impact that the European Central Bank Interest Rate Decision has had on EUR during the last meeting

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

JUL 2013

07/04/2013 11:45 GMT

0.50%

0.50%

-88

-77

July 2013 European Central Bank Interest Rate Decision

Forex_EURUSD-_Trading_the_European_Central_Bank_ECB_Rate_Decision_body_ScreenShot218.png, EURUSD- Trading the European Central Bank (ECB) Rate Decision

Although the European Central Bank stuck to its current policy in July, the Governor Council pledged to keep interest rates low for an ‘extended period’ of time as the monetary union remains mired in recession. Indeed, the ECB’s forward-guidance for monetary policy dragged on the Euro, with the EURUSD dipping below the 1.2900 handle, but we saw the pair consolidate during the holiday trade as it ended the day at 1.2912.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com.

Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, please follow this link.

Looking to use the DailyFX Trade Signals LIVE? Check out Mirror Trader.

New to FX? Fill Out This Quick Form for a Free Tutorial

Questions? Comments? Join us in the DailyFX Forum

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

DISCLOSURES