July 22 2021
There will be no policy surprises from the ECB today.
ECB President Christine Lagarde spoke to numerous media outlets last week. She dismissed any hope of early Euro Zone tapering or tightening of interest rates. She was in fact extremely dovish.
At her press conference today, I expect this tone to continue. However, if she sounds optimistic about the EZ economic recovery, I believe the EUR will finish the day higher.
The reason for my apparent bullishness is purely technical and short term. We have had a week of trying to hammer through 1.1760 to get to 1.1700. It looks to me like the sellers are tired.
It may be that we need more than an already dovish ECB to crack the downside. I think a correction is imminent.
If we do get a correction inspired by an optimistic ECB, Or simply from seller exhaustion.
I am looking for a move up to 1.1840 and then 1.1880, where I would consider taking profit depending on market sentiment. The market seems to have settled down after the possible overreaction to the increase of covid delta cases, which has taken away the demand for safe haven dollars.
If my bullish analysis is incorrect and the market finds more reasons to sell the EURUSD, you should look for a break of 1.1760/50 to confirm a base is not in place. After the break, a test of 1.1720 and then 1.1690 will follow.
Good luck today, if you want to contact me you can at support@8dragonstrade.com
8DC FX 