EUR/USD: driven by short-term data

EUR/USD: driven by short-term data

2020-01-16 • Updated

What’s up?

The European Central Bank will release the minutes of its December meeting on Thursday, January 16, at 14:30 MT time. Then, the US retail sales figures will be out at 15:30 MT time. In addition, the ECB President Christine Lagarde will speak at 20:00 MT time. These events should move the EUR/USD thus proving trading opportunities.

Why is it important?

The new ECB meeting is scheduled for next Thursday, January 23. This event trends to draw great attention of the market. As it always happens, traders will form expectations ahead of it, and today’s release of the ECB Monetary Policy Meeting Accounts will help them to do so. Market players will look for any information about the central bank’s framework review, and, in particular, about whether the regulator plans to change its inflation target.

Currently, the ECB aims to keep inflation “below, but close to 2%”. If the minutes show that central bank members are in favor of a wider target range, for example 1.5%-2.5%, the regulator will have the official excuse not to act very aggressively, even though the inflation is low. Is so, the EUR will strengthen. If, however, the ECB decides to adopt a simple 2% inflation target, it will be able to keep rates lower for a longer period of time to achieve this higher inflation goal. As a result, the initial impact on the EUR will be negative.     

As for the US retail sales figures, the indicator will show how active US consumers were during the Christmas season. Normally, the data should be strong as people tend to buy more ahead of the holidays. The forecasts are rather good, but if the release disappoints, the USD will be hurt.    

The impact on the EUR

So far, the attitude towards the EUR has been quite positive: the market has focused on the positive signs from the European economy, the improvement of the US-China trade relations, and the reduction of Brexit uncertainty. At the same time, the changes for the best seen in the euro area aren’t that big. Without the fiscal stimulus, EUR/USD will be driven up by the USD weakness rather than by the EUR strength.      

EURUSDH4 e.png

EUR/USD has been moving up since January 10. There will be resistance at 1.1180 (October highs) ahead of 1.12 and 1.1240. Support is at 1.1137 (200-day MA), 1.1120 (the bottom of the short-term bullish channel) and 1.1105. In the short term, the upside seems to be the path of the least resistance.

TRADE NOW

Similar

What will move the market on September 6-10?
What will move the market on September 6-10?

Last Friday’s NFP was disappointing. The reaction of the markets was astonishing. Will it last longer? Let's find out the main trade opportunities for the upcoming week.

USD Declines on Powell Remarks
USD Declines on Powell Remarks

After multiple hawkish remarks over the past few days from non-voters members, the Federal Reserve chairman Powell surprised the markets with some dovish remarks…

S&P in the Сrosshairs
S&P in the Сrosshairs

Institutional investors speak about further growth in the stock market. In the exact market that has doubled since COVID-19 and doesn’t plan to stop. Is it possible?

Latest news

Walmart earnings outlook
Walmart earnings outlook

Walmart is one of the biggest retail corporations in the US, with $244 billion in total assets. Does it worth buying amid rising prices and supply concerns that shatter the world economy?

Deposit with your local payment systems

Be on top of your game

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera