How will ECB meeting affect the EUR?

How will ECB meeting affect the EUR?

2023-05-03 • Updated

It's no longer news that Eurozone's headline inflation rate rose in April, exceeding the European Central Bank's target. Eurostat's preliminary data revealed that the headline inflation rate reached 7% last month, a 0.1% rise from 6.9% in March. In contrast, core inflation, which excludes food and energy prices, unexpectedly slowed to 5.6% in April. The latest figures come right after the ECB's policy decision on Thursday, 4th of May, with market players speculating on a possible 25 or 50 basis point increase. The higher headline inflation rate could lead to a 50 basis point hike, while the slower core price growth could push for a more dovish stance with a 25 basis point hike. Despite the consistent rate increases, inflation in the Eurozone remains above the ECB's target of 2%, and further tightening is required to defeat inflation, according to the IMF's Alfred Kammer.

EURUSD - H4 Timeframe

EURUSDH4-0305.png

In line with my previous analysis here (https://fbs.com/analytics/articles/can-usd-reverse-in-april-37668), EURUSD remains somewhat stranded inside the weekly supply zone. The most encouraging indicator for a bearish move is the recent breakout of the wedge pattern. My confirmation for this sentiment is based on the trendline resistance, the rally-base-drop supply zone, and the 76% of the Fibonacci retracement tool.

Analysts’ Expectations:

Direction: Bearish

Target: 1.11011

Invalidation: 1.09551

EURNZD - Daily Timeframe

EURNZDDaily-0305.png

EURNZD had an eventful week at last month's close; a pin bar rejection candlestick formed inside a supply zone on the weekly timeframe. Because of this, I expect to see a continuation of the bearish rally from the marked supply area with an initial target of 1.75390.

Analysts’ Expectations:

Direction: Bearish

Target: 1.75390

Invalidation: 1.80908

EURCAD - Daily Timeframe

EURCADDaily-0305.png

EURCAD is at a key supply zone on the weekly timeframe and has reacted with an initial rejection which closed off last week with a hammer pattern. Therefore, my sentiment is bearish on EURCAD, pending the ECB's decision, based on the resistance trendline of the consolidation channel, the rally-base-drop supply zone, and the weekly supply zone.

Analysts’ Expectations:

Direction: Bearish

Target: 1.48160

Invalidation: 1.51209

CONCLUSION

The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.

TRY TRADING NOW

You can access more of such trade ideas and prompt market updates on the telegram channel.

Similar

XAUUSD: Will Gold Continue to Rally?
XAUUSD: Will Gold Continue to Rally?

Last week I gave a trade idea on XAUUSD with a target around the $2,020 price line. At the time of writing, XAUUSD already exceeded the target and I’m sure that would leave a lot of people wondering what to expect next. Below, I have presented my view of how I expect the price action to turn out in the meantime.

AUD: Trade Ideas
AUD: Trade Ideas

Last Tuesday, the Australian dollar experienced its steepest drop of the year, falling by 1.18%, following higher-than-expected US inflation figures, which boosted the US dollar. However, the Aussie has since rebounded and is now trading at a two-week high against the US dollar. Investors are...

NZD: The Week Ahead
NZD: The Week Ahead

Commerzbank's analysis suggests a brighter outlook for the New Zealand Dollar (NZD) in the coming months despite recent downward pressure. Factors like broader U.S. Dollar strength and domestic issues have kept the NZD below last year's highs. However, robust labor markets in both New Zealand and Australia and an expected...

Latest news

USD Expected To Recover Some Strength
USD Expected To Recover Some Strength

In the early hours of Tuesday, the US Dollar faces challenges in maintaining its strength against major currencies, with the US Dollar Index struggling to surpass the 104.00 mark. Investors are eagerly anticipating the release of key economic data, including January Durable Goods Orders and the Conference Board's Consumer Confidence Index for February. Additionally, the economic calendar includes reports...

CAD: Price Delivery Suggests Strength
CAD: Price Delivery Suggests Strength

In the early hours of Tuesday, the US Dollar faces challenges in maintaining its strength against major currencies, with the US Dollar Index struggling to surpass the 104.00 mark. Investors are eagerly anticipating the release of key economic data, including January Durable Goods Orders and the Conference Board's Consumer Confidence Index for February. Additionally, the economic calendar includes...

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera