With the ECB meeting ahead key for EUR/USD, Ryan Littlestone, Director and Trading Analyst at ForexLive, outlines three things to watch ahead of the Eurozone rate decision, and further shares the trade setup for the EUR/USD into Draghi’s speech.
Three things to watch ahead of the ECB meeting
Price data in manufacturing PMI’s
Unemployment rates
November inflation data
While Littlestone expects the ECB to act on Thursday’s meeting, he believes that the inflation data in the Eurozone will play a key role in deciding how much lower the deposit rates will go.
Trade setup for EUR/USD into the ECB decision
The EUR/USD is trading slightly firm on better data, says Littlestone. He further adds that the Fed will keep the bias for short EUR/USD trade, and after we see a rate hike, short dollar might be the trade to go.
On the trade opportunity into the ECB decision, Littlestone suggests selling the EUR/USD on any bounce if the ECB leaves rates unchanged. For the complete scenario analysis, watch the video.