Almost a month has passed since the last meeting of the ECB. May 8, the Forex market caught the Draghi comment: “ECB open to intervention in June if needed “, but as the famous quote goes: ” Buy the rumor, sell the fact “, and now it looks like a rumor and still not a promised fact, true or false we’ll see. Just the market has been needed of a little cooldown. 27 May the results of European Parliament elections, have not given EUR to rise up, due to increased the number of euro-skeptics.
June 5 most traders waiting anxiously. Will Draghi add the negative deposit rate or interest rate cut? As for me, I do not think that negative rate is the best way to beat the deflation.
There are 2 scenarios in my point of view:
- At a meeting of the ECB (5 June) contrary to all expectations, it wouldn’t be any surprise to us. As a result, the promises made by Draghi at 8 May will not be fulfilled and the pair will fly up.
- EUR price, as usually happens, will go up before ECB meeting (we have a whole 3 days in reserve), but then if Draghi makes a surprise for us – collapse, as market expectations come true.
In my case, I stand in longs on EUR/USD. A good stop 1.3450, but I do not have such opportunities (I mean equity), so my possible loses are placed at 1.3540. EUR anyway, at this point seems to me to be more attractive than Dollar. So, speculators, I am with you. Little correction is a must, but I hope and looking for a good smashing pullback. For better sell, need a higher price.
EUR/USD D1 Chart