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The single European currency continues to show a pronounced sideways movement, and a small surge at the beginning of the US trading session looks quite interesting. Given the absolutely empty information background, you can write everything off as a banal speculative hype. At the same time, this clearly demonstrates the tension that market participants are in. The single European currency has been literally standing still for several days, waiting for the outcome of the meeting of the board of the European Central Bank. Here, anyone's patience will burst. So, yesterday's events clearly demonstrate what can happen today. Of course, all the attention is not on the meeting itself, since the parameters of monetary policy will remain unchanged, but on the subsequent press conference of Christine Lagarde.
It all depends on what the head of the European Central Bank says. If there are words that inflation has reached the target level and there are signs of its stabilization, as well as that the regulator expects it to decrease in the near future, it means that the European Central Bank does not intend to raise interest rates at least in the short term. This will remove certain worries and concerns, and will lead to an increase in interest in the single European currency. If Christine Lagarde expresses concern about the continuing inflation risks, of which there are indeed quite a few, as at least indicated by the dynamics of producer prices, investors will regard this as a warning about an imminent increase in interest rates. And the European economy, according to everyone's belief, is simply not ready for such a thing. In this case, the single European currency will have to seriously retreat from three-year highs.
Refinancing rate (Europe):
After a series of speculative jumps, the EUR/USD currency pair returned to the levels of the beginning of the trading day, as if nothing had happened. The coordinates 1.2160 serve as a variable support, and the price region 1.2200 / 1.2215 plays the role of resistance.
Market dynamics due to the high coefficient of speculative transactions are showing signs of acceleration, but the main surge in activity awaits us ahead. If we proceed from the current location of the quote, we can see the amplitude fluctuation of the price within the lower level of 1.2160.
In this situation, the most optimal trading tactic is the breakout method of the nearest level. In this case, the key levels mean the values: 1.2160, with a downward development and the area of 1.2200 / 1.2215, with an upward development of the market. It should be noted that the breakout of the level must be confirmed by keeping the price outside it for a four-hour period.
From the point of view of complex indicator analysis, we see that the indicators of technical instruments on the 1-minute and 1-hour intervals have a sell signal due to the recent surge in short positions in the market.
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