After The ECB Is Before The ECB
Dear Traders,
As expected, the European Central Bank kept rates unchanged but it also refrained from making any changes to its asset-purchasing program for now. ECB President Mario Draghi merely reiterated that the ECB has the ‘full mandate’ to redesign QE, leaving the door open for additional stimulus. The market’s reaction to the announcement was thus rather subdued. The euro peaked at a high of 1.1327 but was not able to hold onto its gains. We see a resistance zone between 1.1350 and 1.14 and as long as the euro remains below that zone we maintain a neutral stance in the EUR/USD. If the euro drops below 1.1220 we see a higher likelihood of falling prices towards 1.1150.
The British pound tumbled below 1.33 but ended the day virtually unchanged against the U.S. dollar. In a nutshell, there was not much to be gained for daytraders. U.K. Trade Balance is scheduled for release at 8:30 UTC but we do not expect the report to have a major impact on the pound.
The market still lacks momentum and within that low-volatility environment we advise traders to take profits at smaller targets and secure weekly profits.
Have a wonderful weekend.
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