The European Central Bank unexpectedly accelerated its wind-down of monetary stimulus which came as a surprise for market participants as it signals that the ECB is more concerned about inflation than the implications of the war. Adjustments in interest rates would take place “some time” after the end of asset purchases. In other words, yesterday’s decision can be described as hawkish while a first rate hike before the end of the year is still in the cards.
The EUR/USD surged to a high of 1.1121 on the ECB’s hawkish surprise but sellers quickly took the opportunity to sell the single currency on a higher note. We will now wait for a decline below 1.0970 in order to sell euros towards 1.09 or on the other side, a bullish break above 1.1170 to shift the focus to a test of 1.1220-30.
EUR/USD Trading ideas for 11/3/22:
Long @ 1.1035, Short @ 1.0980
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.
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