Canada will release the level of CPI on August 21, at 15:30 MT time.
The market is awaiting the ECB statement
Due to the recent headlines and dovish comments by the ECB president Mario Draghi, there is a 50/50 chance of a rate cut. Some of the analysts suggest that the policymakers will wait for more data before cutting the interest rate. However, according to others, the ECB president Mario Draghi may surprise the market (as he can), and cut the interest rate today. Let’s see how many doves have been adding pressure to the market. Can we see any hawk out there?
Voices for hawks:
- Higher-than-expected European CPI (1.3% vs 1.2% expected).
Voices for doves:
- Lower-than-expected PMIs, PPI.
- Comments by the ECB president Mario Draghi on the further easing;
- Global uncertainties, including trade tensions.
- Dovish Fed.
Thus, if Mario Draghi is dovish and even cuts the interest rate, the EUR may fall lower. On the other hand, in case of the supportive comments by the ECB president, the EUR will rise.
What pairs to trade?
Pay attention to EUR/USD, EUR/JPY and EUR/CHF pairs. All of the pairs are trading near the old support levels of 2017. The dovish statement of the ECB may help them to continue moving within the downtrend.
If you are a bull, look at the EUR/AUD pair. After the dovish comments by the RBA governor today, this is one of the euro pairs which is rising. If the EUR is supported today, the pair will rise significantly. Otherwise, the slide will be inevitable.
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