ECB non-move is still ok (for now)


The EUR/USD cross is extending his recovery at the opening of the London session after the calm is returned following the ECB disappointment. The market focus seems to be on China now, where overnight data led the market to a risk-off sentiment.

At the moment the price is at 1.1281 (+0,19%) after yesterday’s spike followed by a drop which led the pair to touch the 20-DMA before closing positively at 1.1260.

The actual recovery, however, seems to be mainly driven by the US Dollar correction towards his main peers. A movement justified by the drop in the treasury yields after the uncertainty on the timing of the next Fed move on the interest rate. The Fed index still continue to go down (-0,18%) and is now almost at the session low at 94,84.


Yesterday’s session was characterized by the ECB non-move, which decided to maintain his monetary policy without any change, disappointing market expectations of an extension of the bond program until March 2017. Despite president Draghi was pretty clear in specifying that moves in the coming months will be unlikely, i continue to think that the ECB have to adjust his QE program until the end of the year and yesterday’s move was exclusively the “easy” thing to do at the moment: after Brexit everyone was expecting a worsening in the European economy, which at the moment following datas and predictions, has not happened yet.

Under my point of view hence i still remain of the idea that Eurozone growth and inflation data will soon disappoint expectations and ECB consensus bringing the Central Bank to an extension or a change in the QE program.

Today the market will have a close look to the German trade data even if the Fed member Rosengren’s speech could attract investor’s attention in case there will be news on the US interest rate.



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