After a quite trading week, this week, with the return of important economic data promises an eventful week to trade.
Definitely, the main focus is ECB Meeting on Thursday, and we also have a EZ CPI data on Wednesday.
A rate decision and a press conference are what traders watch in the meeting.
So what do they actually expect and hope ?
Clearly, traders are holding massive of SHORT EUR, so they want ECB meeting is a chance to drive EUR lower.
- A 10bp deposit rate cut
- Extending to April 2017
I think ECB should do something to finish this financial year, and with recent incidents occured in Eurozone, ECB is forced to act; this is indeed a strong pressure on them. The problem is ECB signaled in last meeting that they will APPLY MORE MEASURE TO SUPPORT EZ, while EZ economic data weren't bright from that time until now.
ECB shouldn't disappoint market, if not, market would punish Euro leading to a strong retracement and this is what ECB doesn't want.
In conclusion, the divergence between ECB and FED is likelty wider after ECB Meeting on Thursday,
YEAR LOW: 1.0450 , current price :1.0589, only 150 pips to year low.
I indeed want EURUSD test the year low to take profit my short position of EURUSD .
If ECB couldn't provide enough catalyst for EURUSD fall, I wil cut my SHORT position.
A is capturing EURUSD price action .
While and indicators indicate that they are lying in oversold zone for a long time. A short term squeeze is understandable.
One more point, I see EURUSD is too far Kumo cloud and SMA200 as well as SMA100
The longest distance between price and Kumo cloud when it contacted year low is also the distance of current price to Kumo cloud. I think there is a repeat of price. EURUSD should test year low to finish a repeat of price.
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