KTM FX Daily: ECB preview and EURUSD overview
ECB Rate Decision at 13.45 CEST followed by a press conference at 14.30 CEST.
What to expect?
Ahead of today’s ECB meeting, the traders seem preparing for a cautious approach. Therefore, we acknowledge that EURUSD to remain range-bound in the near-term.
We expect the ECB will adopt a wait and see approach. Market participants are particularly focusing on the forward guidance.
We estimate that at that point the ECB will raise interest rates by 0.2 percentage points. However, we still expect bond buybacks to cease towards the end of this year, Deutsche Bank reported in the Market Guide Report.
According to our base case scenario, the ECB will wind down its QE programme (€30bn per month) at the end of September. We continue to forecast the first hike in the deposit rate (from -0.4% to -0.2%) for July 2019, followed by a second depo hike (from -0.2% to zero) in September 2019, reported by UBS.
FX Outlook
EURUSD traced out a medium-term price top between 1.2535-1.2555 between Jan-Feb 2018 via the formation of a double top pattern. Ever since the Feb high, the major has been locked in a range-bound with a bearish tag.
Recent soft economic data especially lagging inflation and the dollar comeback are the key factors to reinforce our near and medium-term bearish views.
Since mid- Feb we kept our near-term bearish profile and thus continue to see 1.2150 and 1.2080 with resistance seems to be at 1.2240 and 1.2330 levels. At last the price posted a low at 1.2160 (Wed) and currently trading at 1.2170 in a Thursday early Asian session. It has lost 100MAs, this suggests that the downturn is set to reassert again.
If the shift in sentiment improves that will trigger a minor rally to resistance 1.2220 and 1.2240 should attract selling interest with support against the early March low 1.2150.
Overall, the major is prone to a meaningful correction because in our view the A-B-C correction pattern aiming at 1.2080. The daily studies RSI and our favorite oscillator RVI has been remaining bearish.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
ECB Rate Decision at 13.45 CEST followed by a press conference at 14.30 CEST.
What to expect?
Ahead of today’s ECB meeting, the traders seem preparing for a cautious approach. Therefore, we acknowledge that EURUSD to remain range-bound in the near-term.
We expect the ECB will adopt a wait and see approach. Market participants are particularly focusing on the forward guidance.
We estimate that at that point the ECB will raise interest rates by 0.2 percentage points. However, we still expect bond buybacks to cease towards the end of this year, Deutsche Bank reported in the Market Guide Report.
According to our base case scenario, the ECB will wind down its QE programme (€30bn per month) at the end of September. We continue to forecast the first hike in the deposit rate (from -0.4% to -0.2%) for July 2019, followed by a second depo hike (from -0.2% to zero) in September 2019, reported by UBS.
FX Outlook
EURUSD traced out a medium-term price top between 1.2535-1.2555 between Jan-Feb 2018 via the formation of a double top pattern. Ever since the Feb high, the major has been locked in a range-bound with a bearish tag.
Recent soft economic data especially lagging inflation and the dollar comeback are the key factors to reinforce our near and medium-term bearish views.
Since mid- Feb we kept our near-term bearish profile and thus continue to see 1.2150 and 1.2080 with resistance seems to be at 1.2240 and 1.2330 levels. At last the price posted a low at 1.2160 (Wed) and currently trading at 1.2170 in a Thursday early Asian session. It has lost 100MAs, this suggests that the downturn is set to reassert again.
If the shift in sentiment improves that will trigger a minor rally to resistance 1.2220 and 1.2240 should attract selling interest with support against the early March low 1.2150.
Overall, the major is prone to a meaningful correction because in our view the A-B-C correction pattern aiming at 1.2080. The daily studies RSI and our favorite oscillator RVI has been remaining bearish.

It is important to always keep in mind the risks involved in trading with leveraged instruments.
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A KTM Analyst is ready to assist you, click on the comment section below