Mario Draghi will be speaking today in Frankfurt
It is slow trading day today and thus, the speech from the ECB President, Mario Draghi stands out. The president of the ECB is expected to speak at a banking event in Frankfurt and his speech comes just a few days after the ECB left monetary policy unchanged. The central bank however signaled that the risks for further rate cuts or QE expansion were diminishing, which sent a hawkish signal to the markets and sent the euro to close at a 4-week high.
Hawkish signal from the ECB president
The hawkish signal from the ECB president was widely expected after the inflation figures showed that the headline CPI was seen rising to 2% for the first time in years. However, core CPI continued to remain a concern, stuck at 0.9%.
Still, the uptick in inflation which was earlier brushed aside was acknowledged last week, meaning that the ECB could be looking at no more QE when the current plans end this year. However, there is also the risk that the markets might have misread the statement, which, the ECB president could possible use today's speaking opportunity to correct himself and the markets.
Therefore, watch out for any potential dovish remarks from the central bank chief that could hit the sentiment in the single currency. The euro also has a busy week, with the FOMC meeting and the Netherlands elections this week, all of which could impact the sentiment.
How we trade binary?
EURUSD is trading at resistance near 1.0700, which was last tested around early February this year. The momentum on the charts is showing some exhaustion on the current rally to 1.0700. Therefore, purchase daily PUT options near 1.0700 - 1.0685 for a 21:00 GMT expiry as we expect a pull back to occur in EURUSD towards 1.0560 support level.
Target price: 1.0700
Expiry: 21:00 GMT