ECB Meeting In Focus This Week
The focus this week shifts again to the European Central Bank and another expected rate cut. The ECB is expected to cut interest rates by 25bp at Thursday’s meeting while another cut is further expected in December. Since this move is fully priced in, traders do not expect fireworks on Thursday. The spotlight will turn to the ECB press conference following the monetary policy decision.
Delivering further easing, the euro is likely to extend its latest slide. Following the robust US jobs report for September, the EUR/USD fell below 1.1000, completing a double top formation. A dovish ECB decision may allow the slide to continue towards the summer-low at 1.0880. Furthermore, the latest rebound in oil prices due to the Middle East tensions poses upside risks to the outlook.
In the unlikely event that ECB policymakers agree to wait until December to cut rates, the EUR/USD could experience a short-squeeze and thus, a strong rebound as investors get caught off guard.
Upcoming U.S. elections (November 5)
The dollar has historically flexed its muscles in the run-up to U.S. elections, driven by rising safe-haven demand amid uncertainty about the election outcome—a pattern that could repeat itself in the coming weeks.
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Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.