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EUR/USD Trading - Mario Draghi’s speech - 28 Nov 2016

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EUR/USD Trading chart 28 Nov 2016
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ECB Chief Mario Draghi to testify before parliament today

ECB president Mario Draghi will be testifying to the EU parliament in Brussels today, which could offer some volatility to EURUSD. The ECB chief has in recent weeks hinted that the central bank will continue with its QE purchases beyond March 2017 noting that inflation and growth remain fragile. His comments added to the euro’s weakness as many expected the ECB to announce tapering its QE program in the December meeting.

ECB President Mario Draghi’s testimony to the EU parliament today could offer clues on the central bank’s position on the QE program.

Inflation in the EU remains weak although recent data showed signs of inflation picking up. Later this week, the Eurostat will be publishing new flash inflation estimates for November, which hints to a further pickup in consumer prices.

However, as various ECB officials hinted in the past week, many remain doubtful if the current pace of inflation rising will be sustainable. Consumer prices in the eurozone remain weak and well below the ECB’s 2% inflation target rate.

EURUSD was showing signs of life on Friday after a prolonged stretch of declines pushed the single currency to new lows last week.

However, the doji candlestick appearance on the daily chart on Friday could signal that traders will be taking a breather and closing some positions ahead of the payrolls report coming up later this Friday as well the looming risk of the Italian referendum on Sunday, December 4th.

How to trade binary

EURUSD posted a reversal just a few pips off the 1.0500 support handle. This poses the risk of a fake breakout to the upside as EURUSD could push back lower. However, the potential for a small retracement cannot be ruled out in the near term.

While EURUSD is seen to be pushing higher, it is best to wait for a pullback to 1.0610 – 1.0594 support level. Purchase CALL options within this price zone for an expiry time of 21:00 GMT. It is best to wait for price to fall to the support zone and then reverse off the support zone as an additional confirmation.

Asset: EUR/USD
Direction: Call
Target price: 1.0610
Expiry: 21:00 GMT

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

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