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Anyone up for trading the euro ahead of the ECB decision? Here’s a potential setup you might wanna look into!

EUR/CHF is approaching an area of interest visible on its short-term time frame, and sellers might return at this point.

But before we look at the chart, let’s take a quick review of price action and market catalysts in the previous trading sessions:

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Upcoming Potential Catalysts on the Economic Calendar:

  • 9:30 am GMT: BOE Credit Conditions Survey results
  • 11:00 am GMT: U.K. CBI industrial orders expectations index
  • 12:45 am GMT: ECB monetary policy decision
  • 1:30 am GMT: ECB press conference

What to Watch: EUR/CHF

EUR/CHF 1-hour Forex Chart
EUR/CHF 1-hour Forex Chart

If you’re into trading the news, then this setup might be worth keeping tabs on in the next few hours.

EUR/CHF is in correction mode as it pulls back to the area of interest or former support turned resistance around the 1.8000 major psychological mark.

This happens to line up with the 50% Fibonacci retracement level where euro bears might be hanging out. It looks like some sellers are eager to hop in at this 38.2% Fib, though!

The 100 SMA is below the 200 SMA to confirm that upside barriers are more likely to hold than break. Meanwhile, Stochastic is nearing the overbought zone to signal exhaustion among sellers.

No actual changes are expected from ECB head Lagarde and her fellow policymakers, but there might be some talk of inflation concerns. Some market watchers could also be on the lookout for verbal FX intervention, possibly mentioning how the central bank is keeping a close eye on euro strength these days.