CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

ECB Preview Focus On Strategic Review

Article By: ,  Senior Market Analyst
January 22, 2020 6:13 AM
When : 

Thursday 23rd January

Key points:

  • No change to policy expected
  • Learning to read Christine Lagarde
  • Strategic review
No change to policy expected

The ECB ae not expected to alter monetary policy. Data since the December meeting is pointing to the slowdown in the eurozone economy bottoming out. However, there is still no sign of a rebound in the manufacturing sector. Concerns also exist that the slowdown in the manufacturing sector could still spill over into the labour market. Inflation is showing some signs of picking up, which will offer some reassurance to the ECB. However, at 1.3% it may be at the joint highest level since March last year, but it is still significantly short of the central bank’s 2% target.


Reading Christine Lagarde
This all means that we aren’t expecting any fireworks from the ECB regarding monetary policy. A continuation of wait and see and an opportunity to learn to how to read Christine Lagarde who has just three months in office.

Strategic review
Perhaps of more interest and the highlight of this month’s meeting will be the kicking off of the strategic review. The scope and parameters for the review need to be set and could garner attention. Going forwards (the review could take a year) the definition of price stability and how to reach it will almost certainly be the most important part of the review. We could eventually see a new definition for the “around 2% target” for inflation, possibly changing to a more flexible range.

EUR/USD levels to watch
EUR/USD is holding steady at the time of writing and remains below $1.11. The pair is also below its 50,100 and 200 sma on 4 hour chart, a bearish sign.
Sustained weakness below $1.1065 could confirm EUR/USD’s bearish bias, setting the stage for further declines towards $1.1050 and towards the key psychological $1.10 level.
A move above $1.1095 should bring resistance at $1.1110 and $1.1120 into play. A move above $1.1175 could negate the current bearish bias.


StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024