Ticker tape by TradingView

July 19, 2022

Euro Is About To Make A Big Move

Frank Cabibi

The European Central Bank will be announcing their main refinancing rate decision on Thursday. This will bring a lot of attention to the euro, especially since the expected rate is 0.25%. Whatever the central bank decides, it will make for an interesting week for these pairs.

What To Expect

Forecasts have it set at a 25 basis point hike from 0%. This would be the first time in 6 years that the euro would be yielding a positive interest. Investors see this as big news and are likely pricing in a big move to the upside.

euro
ECB interest rate

Analysts also think that the refinancing rate will even go as high as a 50 bp hike. A hike that big will cause even more of a price surge in the short run. And investors are probably going to be pushing euro higher until Thursday.

However, in the longer term the euro is still way behind in terms of inflation. Yielding half a percent is a big event for the ECB, but it does not mean much in the grand scheme. Both the USD and EUR suffer from high inflation that isn't slowing down yet. The only difference is that the US has been combating this since for the past several months while Europe has not.

This holds true even when the euro is paired with other currencies like the kiwi, loonie, pound and buck. But it doesn't mean we won't see a decent pop in the euro's near term price this week. The long run just seems to be not in favor of the euro.

Euro Trade Setups

EUR/USD

euro

EURUSD comes up nearly 1% at the start of the NY session. Price has strong momentum on the expectation of a 25-50 bp rate hike which could take price up to test resistance around 1.03600 or even the falling trend line above that. The overall trend is still very bearish, so a profitable strategy could be to ride price up to these levels before a short setup forms.

EUR/JPY

euro

Euro-yen is in a similar situation as EURUSD, but it looks like price will come up to test 142.900 or even the 143.800s above that level. Price just crossed above support with a rising trend line below that on the 1D timeframe. A decent short opportunity lies at that triple top near 144.

EUR/CAD

euro

EURCAD has been exceptionally weak this year as price may have already topped out. Price is showing considerable rejection on the 1D timeframe after going up to touch resistance at 1.32948. More resistance sits higher at 1.33868. A close with heavy rejection could lead the pair down to the lows below 1.3.

A1 Edgefinder

FLASH SALE
Take 10% off the Edge finder using code "READER"
GET ACCESS NOW

want to see what we're trading?

Join The VIP Community!
Our entries, exits & analysis
Live Webinar Coaching
Trading Chatrooms
Strategy Library 
Exclusive Trading Guides
Use Code "READER" for 10% OFF!
JOIN NOWJoin FREE Discord
A1 Trading Podcast
Why Global Recession Is Still Likely

On Friday this past week, the United Kingdom’s Office for National Statistics released the latest reports on the UK’s Gross Domestic Product (GDP), a means of measuring economic output. It was revealed that their economy grew by -0.6% month-over-month, and -0.1% quarter-over-quarter, which entails a contraction for both timeframes. Although these numbers are less disastrous […]

Read More
Has Everything Changed for Major Pairs?

This week the public received startling news: on Wednesday morning, month-over-month CPI (a proxy for inflation) in the United States had unexpectedly remained static, clocking in at 0% whereas a moderate 0.2% increase had been forecast. Core CPI (which excludes food and energy prices) likewise came in lower than anticipated at 0.3% month-over-month, while Thursday […]

Read More
Buy Kiwi Now Before Rate Hike

Next Tuesday, the RBNZ will announce their new official bank rate which is expected to be 3%, a 0.50% rise from July. This hike will make it the highest yielding major currency on the market. Here is why you should consider buying the kiwi before Tuesday's decision as well as some strong NZD long setups. […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
VIP
Menu
homesmartphonelaptopmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram