The oil market is always highly volatile.
What to expect from the ECB meeting?
Today we are waiting for the news from the European Central Bank. The ECB press conference will be held at 15:30 MT time.
It is worth to say that last time in December the ECB left its monetary policy unchanged. So let’s see what we can expect from this meeting.
Most of the economists suppose that the ECB will not change the monetary policy again because of an obstacle - the continuing quantitative easing that it promised to hold until September 2018. However, we can say that this time the most interesting part of the conference is not interest rates, but comments of the bank President. First of all, Mario Draghi will face a huge number of questions over how fast the central bank is going to change its policy. Secondly, his address and comments will affect the EUR/USD pair. The pair was rising since the beginning of 2017 and recently achieved a new 3-year high. Such growth creates worries for the ECB because continuing rise of the currency is not good for the economy. That is why the ECB should gradually shift its stance to avoid a more destructive move in the future. And it is what economists are waiting from Draghi, they expect him to announce gradual policy changes. Although no one expects immediate changes in the ECB policy, traders will pay a lot of attention to the speech of the President. During the conference, the single currency will be vulnerable.
As for numbers, analysts from Danske Bank forecast the fall of the single currency to 1.20 in short-term, but not lower. However, it is expected to surge to 1.28 by the end of the year, if only inflation will grow to 2%.
So we can say that the ECB monetary policy will likely stay stable but the conference will affect the EUR/USD pair a lot. Considering future, economists are looking for policy changes in March/April meetings.
More forecasts on EUR/USD rate you can find here
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