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.
Target price: 1.0610
Expiry: 21:00 GMT