How to trade next ECB meeting?

How to trade next ECB meeting?

All the traders and global markets are waiting for the key event for this week, which is the European Central Bank meeting and Mario Draghi press conference. Although, the Bank of England holds MPC  meeting on the same day, the markets’ will focus mostly on the ECB decisions.

So Far, markets adopted “wait-and-see” attitude ahead of the European Central Bank meeting. The EUR/USD pair moved today above $1.3900-mark getting closer to $1.40 critical zone, a zone that the ECB president Draghi and high ranking officials qualified as negative for the inflation and may prompt ECB monetary easing intervention. Last week data showed that the Euro zone inflation rate rose to 0.7 percent on the previous month but still below the ECB main target of 2 %.

Many analysts don’t expect any action form the ECB in this month, and it may be postponed to June.  And they think that Euro zone monetary policy is likely to remain steady.

However both the ECB decision and Mario Draghi speech will determine the next direction of the EUR/USD prices. In fact if Mario Draghi surprises the market and the ECB cut unexpectedly the Euro zone interest rates, it can send the Euro to drop sharply. However, the Euro can go higher if he will not mention any new decision or he does not take some measures to tackle inflation in Euro zone.

MBCFX Forex & CFDs Brokerage Firm