ECB decision: Thursday, the decision at 11:45, press conference at 12:30. The European Central Bank is set to introduce a significant package of monetary stimulus. The Frankfurt-based institution has already hinted at this in its previous meeting in July. A looming German recession, slowing global demand, and subdued inflation has all pushed the bank to pre-announce a move. A rate cut of 10 basis points from the current deposit rate of -0.40% – already deep in negative territory – is a minimal step and priced in by markets. President Mario Draghi and his dovish colleagues may push for a deeper cut of 20bp or even a resumption of the bond-buying scheme (QE). However, hawks such as Bundesbank President Jens Weidmann will likely push back. The euro may rise if the ECB settles for a minor rate cut – especially if it is accompanied by a tiering system that exempts some banks from lower rates. If the bank goes for a more aggressive move, the common currency has room to fall.
US inflation: Thursday, 12:30. One of the main reasons for the Federal Reserve’s rate cut in July was low inflation. Less than a week ahead of the next Fed decision, it will receive fresh inflation figures for August. Headline Consumer Price Index (CPI) rose by 0.3% in July and Core CPI by 0.3% on a monthly basis and 2.2% on an annual one. An acceleration may cast doubt on the Fed’s intentions to raise rates, while a fall back to 2% or lower may trigger speculation for a more dovish message.
USD
US inflation
EUR
ECB decision
- EURUSD
As could be seen on the chart above that the pair is traded below a strong resistance level that is 1.1065. Therefore, we will be waiting for some bearish evidence below this level then we can go short targeting the level of 1.0950.
Resistance levels: | Support levels: | Recommended: |
▪ 1.1242 ▪ 1.1180 ▪ 1.1065 |
▪ – ▪ – ▪ 1.0950 |
We are bearish as long as the pair is traded below the level of 1.1065. |
- GBPUSD
The chart above shows that the pair is traded below a strong resistance level that is 1.2380. Therefore, we are bearish as long as the pair is traded below it. Our first target is 1.2250. Conditioned by the continuation of trading above the level of 1.20.
Resistance levels: | Support levels: | Recommended: |
▪ 1.36 ▪ 1.3310 ▪ 1.2550 |
▪ – ▪ – ▪ 1.20 |
We are bearish as long as the pair is traded below the level of 1.2380. |
- GOLD
As could be seen on the chart above that the pair is traded below a strong resistance level that is 1525. So, we are bearish as long as the pair is traded below it. Our first target is 1498.
Resistance levels: | Support levels: | Recommended: |
▪ 1550 ▪ 1540 |
▪ 1490 ▪ 1260 ▪ 1265 |
We are bearish as long as the pair is traded below the level of 1525. |
- AUDUSD
As could be seen on the chart above that the pair is traded below a strong resistance level that is 0.6900. We can go short in case the pair shows up some bearish evidence below this level. Our first target is: 0.6830.
Resistance levels: | Support levels: | Recommended: |
▪ 0.7550 ▪ 0.7600 ▪ 0.7000 |
▪ 0.6680 ▪ 0.6650 ▪ – |
We are bearish. |
- GBPJPY
The chart above shows that the pair is traded above a strong support level that is 131. Therefore, we are bullish as long as the pair is traded above it. Our first target is 135.
Resistance levels: | Support levels: | Recommended: |
▪ 135 ▪ 136 ▪ 136.50 |
▪ 132 ▪ 131 ▪ 130 |
We are bullish. |
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