ECB Interest Rate Decision and US Economic Data In Focus
Key Takeaways:
- ECB's interest rate decision and US GDP data are focal points.
- Technical indicators suggest a bearish trend, but bullish reversal signals are emerging.
- Trade insights focus on trend confirmation and strategic entry points.
Morning Brief:
Today's financial schedule is marked by pivotal events. The European Central Bank (ECB) will disclose its interest rate decision, anticipated to hold at 4.50%. Significant attention will be on President Lagarde's conference for hints on potential rate reductions.
Attention then shifts to the US, with vital data releases. The spotlight is on the US GDP, forecasted to decelerate to 2.0% from the previous 4.9%. Other key US data includes PCE inflation, durable goods orders, jobless claims, and real estate indicators.
Daily Economic Calendar:
- Germany: IFO Business Sentiment Index (10:00) - Forecast: 86.7, Previous: 86.4
- Euro Zone: ECB Interest Rate Decision (14:15) - Forecast: 4.50%, Previous: 4.50%
- US: GDP and Other Economic Data (14:30)
- Euro Zone: ECB Press Conference (14:45)
- US: New Home Sales (16:00)
- Euro Zone: ECB President Speeches (16:15, 17:00)
Technical Market Outlook:
The EUR/USD pair is showing a shift in trend, breaking below short-term support at 1.0928 and reaching a low of 1.0822. Bears target 1.0743, the low of December 2023. Resistance is at 1.0910 and 1.0923. A breakout above this zone may signal a bullish shift.
Trend Analysis:
The uptrend is weakening, with the price below the 100 EMA and 50 DEMA, indicating a potential trend reversal.
Candlestick Patterns:
A "Hammer" pattern suggests a bullish reversal, while a "Bearish Engulfing" pattern signaled the initial bearish shift.
Moving Averages:
The price is below the key EMAs, serving as dynamic resistance.
RSI:
The RSI is at 53.64, indicating neutrality in market momentum.
Intraday Indicator Analysis:
- Technical Indicators: 9 Buy, 5 Sell, 8 Neutral
- Moving Averages: 13 Buy, 5 Sell
Market Sentiment:
The general sentiment on the scoreboard is bullish (59% vs.41% bears). Last week sentiment remains bullish as well (58%bulls vs.42% bears) while the last three days sentiment is bullish as well (57% bulls vs.43% bears).
Weekly Pivot Points:
WR3 - 1.09393
WR2 - 1.09207
WR1 - 1.09136
Weekly Pivot - 1.09021
WS1 - 1.08950
WS2 - 1.08835
WS3 - 1.08649
Trading Insights:
Bulls: Confirm the Hammer pattern and seek entry points above resistance, using moving averages as support.
Bears: Monitor for reversal signals, taking profits or adjusting stop losses near oversold RSI levels.
Conclusion:
The forex market, particularly EUR/USD, is at a critical juncture. Traders should keenly observe the ECB's decisions and US economic data for cues. While bearish trends dominate, emerging bullish signals should not be ignored. In trading, staying informed and adaptable is key.
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Important Notice
The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.
Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.
