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.
