ECB President, Mario Draghi to speak later today
It is a slow trading day today with not much of economic reports to go by. In a quiet trading session, the scheduled speech by ECB President, Mario Draghi due later this evening will be in focus. The ECB president is expected to speak at an awards ceremony in Italy and his comments will come after last week's ECB monetary policy meeting where the central bank left interest rates and QE unchanged.
European Central Bank - monetary policy unchanged
Despite the European Central Bank leaving monetary policy unchanged, the euro fell on the day on Thursday last week but managed to recover by Thursday's close. The euro has since then been trending strongly against the U.S. dollar which is hit by weaker sentiment and uncertainty from the new Donald Trump administration.
However, the euro is unlikely to maintain the gains currently as the UK awaits the Supreme Court ruling on Brexit due tomorrow. It is widely speculated that the Supreme Court will rule in favor of the UK putting the Brexit referendum to a parliamentary vote which could be negative for the euro.
Combining the above factors, it suffices to say that the EURUSD could remain range bound within 1.0800 and 1.0600 price levels with lack of any clear catalyst to keep the momentum going.
How to trade binary
EURUSD is likely to continue its ascent towards 1.0800 resistance level in the short term. Price action posted a strong reversal in the early part of December at this level sending the single currency to lows of 1.0400. A retest of this resistance level could yet again prove hard to break which could keep EURUSD biased to the downside. This bearish view is also validated by the hidden bearish divergence that is seen on the daily chart for EURUSD.
Therefore, look to purchase daily PUT options at 1.0800 – 1.0790 resistance level for a 21:00 GMT expiry time as we suspect that EURUSD will be turning weaker in the coming days this week following a retest to 1.0800 resistance level.
Target price: 1.0800
Expiry: 21:00 GMT