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Concerns over a messy Brexit and a fresh wave of COVID-19 infections have put the pressure on the ECB to up its stimulus efforts.

Can Lagarde’s speech help the euro this week?

Here are the potential catalysts you need to know about if you’re trading the euro or the franc in the next couple of days:

Will “second wave” fears alter the ECB’s plans?

  • In a speech last week, European Central Bank (ECB) Governor Christine Lagarde shared that the central bank is ready to add stimulus if needed
  • Lagarde and her team currently expect a “rebound” that’s “uneven and incomplete” in Q3 2020
  • ECB members are also paying attention to EUR’s appreciation and its impact on inflation
  • Fears of a second wave of COVID-19 infections could shake up the ECB’s current expectations
  • Lagarde will make an introductory statement at the ECON Committee of the European Parliament today at 1:45 pm GMT
  • She will also speak at the ECB’s Watchers Conference on Wednesday at 7:20 am GMT

Closely watched data releases

  • Germany’s preliminary CPI (Sept 29, London session) seen dipping from -0.1% to -0.2%
  • Germany’s retail sales (Sept 30, 6:00 am GMT) to jump from -0.9% to 0.5%
  • Germany’s unemployment change (Sept 30, 7:55 am GMT) expected to shed another 12,000 jobs in August
  • Initial PMIs from Spain and Italy and final readings from Germany and France (Oct 1, London session) are generally expected to show improvements from last week’s readings
  • Eurozone PPI (Oct 1, 9:00 am GMT) could print at -2.7% after a -3.3% reading in July
  • Eurozone unemployment rate (Oct 1, 9:00 am GMT) to inch higher from 7.9% to 8.2%?
  • Eurozone headline inflation estimate (Oct 2, 9:00 am GMT) seen at 0.1% after falling by 0.4% in August
  • Eurozone core inflation rate expected to remain at 0.4% while the annualized reading could print at -0.3% from a -0.2% figure

Overall appetite for European currencies

  • Swiss voters recently rejected the end to free movement with the EU, which should support both the Swiss and the EU economies
  • Brexit concerns can limit the demand for the euro
  • ECB sharing that it’s monitoring EUR’s gains should also limit the euro’s gains across the board
  • U.S. election drama, NFP releases, and COVID-19 concerns can affect the demand for the safe-haven franc

Lower-tier releases from Switzerland

  • Though they usually don’t affect the franc’s prices for long, these data points can cause intraday volatility for CHF
  • KOF economic barometer (Sept 30, 7:00 am GMT) could dip from 110.2 to 107.0 in September
  • Credit Suisse economic expectations (Sept 30, 8:00 am GMT) seen dropping from 45.6 to 40.2 in August
  • SNB’s quarterly bulletin (Sept 30, 1:00 pm GMT) last reflected the central bank’s willingness to accelerate its currency interventions
  • Inflation data (Oct 1, 6:30 am GMT) could see a steady (-0.9%) annual rate but a slightly lower (-0.1% from 0.0%) monthly figure
  • Retail sales (Oct 1, 6:30 am GMT) expected to dip by 0.4% (from +0.7%) while the annual reading could also weaken from 4.1% to 3.2% in August
  • Manufacturing PMI (Oct 1, 7:30 am GMT) to improve from 51.8 to 52.4?

Technical snapshot

  • Stochastic considers the euro “overbought” against the Aussie
  • EUR/USD and EUR/JPY are “oversold” on the daily time frame
EUR Forex Pairs Stochastic from MarketMilk
EUR Forex Pairs Stochastic from MarketMilk
  • EMAs show the euro’s short and long-term bullish trends against the Aussie and franc
  • Watch out for retracement or reversal opportunities on EUR/CAD, EUR/USD, EUR/JPY, and EUR/GBP
EUR Forex Pairs EMAs from MarketMilk
EUR Forex Pairs EMAs from MarketMilk
  • Stochastic is highlighting CHF’s “overbought” conditions against the Aussie
  • The franc is “oversold” against its fellow safe havens on the daily time frame
CHF Forex Pairs Stochastic from MarketMilk
CHF Forex Pairs Stochastic from MarketMilk
  • CHF was most volatile against AUD, GBP, NZD, and USD in the last seven days
CHF Forex Pairs Volatility from MarketMilk
CHF Forex Pairs Volatility from MarketMilk

Missed last week’s price action? Read EUR & CHF’s price recap for September 21 – 25!