Today at 11:45 (GMT) , the European Central Bank will release its highly anticipated Monetary Policy Statement, and ECB President Mario Draghi will comment on the decision at a press conference held 45 minutes later.
Expectations are to leave things unchanged , If seen , nothing is gonna help the EURO to recover higher , and another leg down will be suggested , however ; a cut in rate will bring unexpected bearish move – could reach 1.2389 – today , while an increase in rate should terminate the current bearish run and surprise the market by a sudden and strong rise (1.2825 )!!!
Focus will be also on Mario Draghi’s comments in the press conference , basically ; the most importantly, it provides hints regarding future monetary policy. volatility can be seen during the press conference as press questions lead to unscripted answers.
Conclusion : Since the recent announcement of the European Central Bank last month , everything in the euro zone is moving slowly for the worst, the marginal lending facility’s at 0.3% , the deposit rate is at -0.2% , inflation is now down to 0.3% – nothing worse than this – so nobody is really expecting any more rate cuts ?!!!!
The most important question is : How will the European Central Bank respond to the disappointing Euro Zone statistics?!!!!
Let’s take a quick look to technical view this morning ?!!!
According to the 4 hour chart , the pair is in overbought area , printed resistance at the 1.2675 levels , stability below this level on a 4 hour closing basis will keep the pair under pressure , support comes at the 1.2620 levels , a cut will open 1.2570 levels where another cut should reach 1.2500 levels , further downside will pave the way towards the 1.2450/1.2389 levels.
On the upside , a clear break above the 1.2675 levels will put the pair in recovery mode , but recovery mode should be limited by the 1.2825 levels , break of the 1.2825 levels will terminate the current bearish run and open the 1.2930/1.3000 levels…
In all , as long as resistance 1.2675 holds on a 4 hour closing basis , outlook in EURUSD remains on the downside towards the 1.2570/1.2500 levels , above the 1.2675 levels will bring limited gains towards the 1.2757/1.2825 levels ..