EURUSD Price, Chart and Analysis:
- ECB meeting will leave all monetary policy levers untouched.
- FOMC minutes and Brexit discussions later in the day.
ECB Policy, FOMC Minutes, EU Brexit Summit
ECB President Mario Draghi will leave monetary policy unchanged again today but his commentary at the subsequent press conference needs to closely followed. At the last meeting President Draghi downgraded EU growth prospects and pushed any interest rate hike further out until at least mid-2020. Recent Euro-Zone data has been mixed ahead of this meeting and is not as weak as prints from the start of the year, but Tuesday’s IMF growth downgrades – within the single-block and globally – will temper any positive sentiment. No further updates are expected on the shape of the latest round of TLTROs or the recently discussed ECB bank tiering, but this could change if Draghi feels that the EZ growth slowdown is becoming entrenched.
Later in the session the latest FOMC minutes are expected to show that the Fed remains data dependent and will wait patiently before moving interest rates, either up or down. The balance sheet reduction program may be discussed further including duration and the ratio of mortgage-backed securities to US Treasuries on the balance sheet.
Around the same time as the FOMC minutes, the EU may well outline the offer of a new Brexit extension to the UK with expectations currently between 9 and 12 months. The extension is expected to include a break clause that would allow the UK to leave earlier if it ratifies the Withdrawal Agreement.
Euro volatility remains low and will need an unexpected announcement or update to break it out of its recent torpor.
Weekly Euro Volatility.
EURUSD remains rangebound although the longer-term trend still points to lower prices. The recent higher low at 1.1182, made on April 2, has applied a brake to the gradual sell-off but price action still suggests a re-test of this level. To the upside, 1.1300 acts as initial resistance before the 200-day moving average comes into play at 1.1424.
EURUSD Daily Price Chart (August 2018 – April 10, 2019)
Retail traders are 63.9% net-long EURUSD according to the latest IG Client Sentiment Data, a bearish contrarian indicator. However recent daily and weekly positional changes suggest that EURUSD may soon reverse higher despite traders being net-long.
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