Will the ECB finally take action?

<p>The BoE and ECB meetings are scheduled for today and it is always an interesting build up to the releases. First up will be the BoE […]</p>

The BoE and ECB meetings are scheduled for today and it is always an interesting build up to the releases. First up will be the BoE statement, with no change expected and asset purchases expected to stay at £375bn and the interest rate to stay at 0.50%. The more interesting data will come from the votes later in the month to see if the dynamics are changing more in favour of a rate hike.

The biggest event today will be the ECB rate announcement, with an expected unchanged rate at 0.15%. A lot of uncertainty and pressure is building on the ECB to act on its low inflation. Could we see a further cut to boost inflation as they have previously done, or will they stay the same and plead for more time for it to work? The press conference will probably be the most volatile hour or so as traders try to determine the underlying message mixed in with some calming comments. Most importantly, will the ECB enter another round of QE? Draghi has been saying that they are ready to act if needed and we can expect some moves in the euro today.

Not to miss out on all the fun, the US ADP will be released today, expected at 218k – the same as last time. This data becomes a benchmark for most, as the other big event this week will be tomorrow’s non-farm payrolls.

 

EUR/USD

Supports 1.3126 1.3105 1.3088 | Resistance 1.3164 1.3181 1.3202

 

USD/JPY

Supports 104.65 104.41 104.08  | Resistance 105.21 105.54 105.78

 



GBP/USD

Supports 1.6433 1.6407 1.6375 | Resistance 1.6491 1.6522 1.6548

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.