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The highly anticipated European Central Bank monetary policy statement is right around the corner, which makes today’s breakout in EUR/USD one to watch.

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 12365.12 +0.79%
FTSE: 7343.93 +1.05%
S&P 500: 2988.04 +0.29%
DJIA: 26956.33 +0.17%
US 10-yr 1.725% +0.023
Bund 10-YR -0.569% -0.018
UK 10-YR: 0.634% -0.004
JPN 10-YR: -0.223% +0.037
Oil: 57.64 +0.42%
Gold: 1501.40 +0.15%
Bitcoin: 9984.46 -0.91%
Etherium: 175.83 -2.04%

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • Japan Machinery orders & PPI at 12:50 am GMT (Sept. 12)
  • Japan Tertiary industry activity at 5:30 am GMT (Sept. 12)
  • German CPI & HICP at 7:00 am GMT (Sept. 12)
  • Swiss PPI at 7:30 am GMT (Sept. 12)
  • French CPI & HICP at 7:45 am GMT (Sept. 12)
  • European Industrial production at 10:00 am GMT (Sept. 12)
  • European Central Bank Monetary policy statement at 12:45 pm GMT (Sept. 12)
  • ECB Press conference at 1:30 pm GMT (Sept. 12)
  • Canadian House prices at 1:30 pm GMT (Sept. 12)
  • U.S. CPI at 1:30 pm GMT (Sept. 12)

What to Watch: EUR/USD

EUR/USD 1-Hour Forex Chart
EUR/USD 1-Hour Forex Chart

EUR/USD Definitely makes the top spot of today’s watchlist, not only on the high likelihood of volatility up ahead due to the upcoming ECB monetary policy statement, but also on a fresh move out of a text book technical pattern.

First, touching upon the upcoming ECB meeting, expectations are that the ECB will pull the trigger on fresh stimulus.  And to read more on why that is likely the case, read up on the event by checking out “What to Expect for the September ECB Statement” from Forex Gump. He touches on analyst predictions and recent rhetoric from ECB members, and with that, you can develop your directional bias going into the event.

For the bulls, a less dovish statement than expected may likely create a “buy-the-rumor, sell-the-news” reaction, especially now that we’re seeing euro selling in today’s session ahead of the event. If this is the case and the euro rallies enough to break the recent resistance around 1.1060 – 1.1080, this could draw in momentum players for a short-term run to the next resistance area (1.1100 – 1.1150)

For the bears, macro fundamentals and longer-term price action is currently in your favor, and if we don’t see a “less than expected dovish statement” scenario, then the trend lower is likely to hold. But as mentioned above, the “buy-the-rumor, sell-the-news” scenario has a legitimate chance of playing out after today’s fall in EUR/USD, so you may want to look at scaling into a short position from current levels up to the 61% Fibonacci retracement level marked chart above (around 1.1075), which is also within the daily ATR range of around 90 pips.