Getting ready for the ECB meeting next week

Dmitry Lukashov IFC Markets

In this review, we suggest to consider a personal composite instrument (PCI) & EUR_Index. It reflects the dynamics of changes in the value of the euro relative to other world currencies.Will the EUR_Index quotations grow?

The growth of this PCI indicates the strengthening of the single European currency. The main factor for this could be a stable positive trade balance of the Eurozone, amounting to about 20 billion euros per month. The positive trend can continue. According to the Center for European Economic Research (ZEW), business activity in Germany increased significantly in October. Next week, on October 24, the next meeting of the ECB will be held. Accordingly, this week, a number of representatives of the European regulator are expected to speak, which may affect the dynamics of the euro.

On the daily timeframe EUR_Index: D1 moved into a short-term neutral trend. Various technical analysis indicators have generated signals to increase. Further growth of quotations is possible if positive macroeconomic indicators are published in the EU and the current ECB policy is maintained.

The Parabolic indicator gives a bullish signal.

The Bolinger bands widened, indicating high volatility. Both Bollinger Lines Slope Up .

The RSI indicator is above the 50 mark. It has formed a divergence to increase.

The MACD indicator shows a signal to increase.

The bullish momentum may develop if EUR_Index exceeds its last upper fractal and the upper Bollinger line: 0.997. This level can be used as an entry point. Initial stop lose may be placed below the last lower fractal, the lower Bollinger line and the Parabolic signal: 0.983. After opening the pending order, the stop shall be moved following the Bollinger and Parabolic signals to the next fractal minimum. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place a stop loss moving it in the direction of the trade. If the price meets the stop level (0,983) without reaching the order (0,997), we recommend to cancel the order: the market sustains internal changes that were not taken into account.

Technical Analysis Summary

Position: Buy

Buy stop: Above 0,997

Stop loss: Below 0,983

Want to get more free analytics? Open Demo Account now to get daily news and analytical materials.

Author

Dmitry Lukashov

IFC Markets

Dimtry Lukashov is the senior analyst of IFC Markets. He started his professional career in the financial market as a trader interested in stocks and obligations.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.