EUR/USD. September 9. Results of the day. Mario Draghi is preparing to cut rates, the euro is bracing for a new fall

Trading 10 sept 2019 Donner votre avis

4-hour timeframe


Amplitude of the last 5 days (high-low): 39p - 53p - 69p - 68p - 37p.

Average volatility over the past 5 days: 53p (average).

The euro currency ends the first trading day of the week, September 9, quite positively. Given the fact that no macroeconomic statistics were published today, the euro was still able to show growth by 40 points from the low of the day it had reached at night. Not bad for the euro. If the price does not sharply retreat in the coming hours, then the EUR/USD pair will overcome the Senkou Span B line, which is a strong resistance. Accordingly, the signal to buy a "golden cross" will increase, which will give confidence to the bulls in their own strengths. In the near future we are waiting for the euro/dollar pair at the resistance level of 1.1099.

From a fundamental point of view, as we have already said, there is absolutely nothing to note today. Thus, we can only speculate about the euro's prospects ahead of the ECB meeting, which will be held this Thursday. According to the absolute majority of economists, Mario Draghi will announce not only a reduction in rates, but also announce the use of other instruments that stimulate the economy of the eurozone. First of all, we are talking about the resumption of the quantitative stimulus program, that is, the redemption of bonds from the open market, filling the market with cash at the same time. To do this, you will have to turn on the printing press, which until recently worked continuously since 2008. These measures are designed to spur inflation, business activity, consumer confidence and economic growth.

However, if the ECB goes for monetary policy easing this week, it almost guarantees itself criticism from US President Donald Trump, from whom we expect a new batch of accusations of deliberate undervaluation of the euro. Of course, the ECB is not obliged to respond to criticism of the odious US leader. But it is worth remembering and understanding that the angrier Trump is then the higher the probability of a trade war between the United States and the EU. Trump believes that the European Union, first, particularly understates the euro exchange rate to have an advantage in production, and secondly, the advantage in production plus a cheap euro gives an advantage in world markets for products from the EU. Accordingly, products from the European Union displace American products from world markets, becoming more competitive. This is reason enough to accuse the European Union of "unfair treatment of the US" and impose duties on the automotive industry, which is popular in the United States. In addition, Trump is likely to again bring down a barrage of criticism on the Federal Reserve and Jerome Powell, because the Fed will hold a meeting a week after the ECB meeting. As Trump needs much lower rates than current, but Powell goes to mitigation rather reluctantly, moreover, in his last speech, he in no way hinted at a possible rate cut in September, it needs a little "spur" to remind you that monetary policy should be more flexible as quickly as possible. In general, the war between Powell and Trump is also likely to get its continuation this week and next.

Well, what about the euro/dollar currency pair? The euro is still growing, and this is positive. However, if the ECB softens monetary policy, the euro will begin to decline almost guaranteed. It is difficult to imagine now what can make traders refuse new sales of the euro if the regulator lowers rates to a record -0.5% and revives the QE program?

Trading recommendations:

The EUR/USD pair resumed the upward movement as part of a very unstable upward trend. Thus, it is now recommended to buy the euro while aiming for 1.1099. The market may remain in a "bullish" mood until Thursday. It is recommended to return to selling the pair not earlier than when the price is consolidated below the Kijun-sen critical line.

In addition to the technical picture, fundamental data and the time of their release should also be taken into account.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicator window.

The material has been provided by InstaForex Company -

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