ECB Preview: Central Bank In Wait & See Mode
Fiona Cincotta January 20, 2021 10:48 AM
After big policy decisions last month, January's meeting is expected to be quieter affair
The ECB is due to give its first policy decision of 2021 on Thursday 21st January at 12:45pm, followed by a press conference at 13:30pm.
Short term risk has turned even further to the downside with higher covid cases and tighter lockdown restrictions. The vaccine rollout is also taking longer than initially hoped.
The strength of the Euro has been in focus over recent weeks and we already know that the ECB is monitoring the exchange rate. Its worth watching out for any comments over the Euro’s elevated value. However, its unlikely that the ECB will take any action.
The EUR/USD is under pressure around 1.21 after rising to an intra session high of 1.2158 and bouncing off resistance of the descending trendline and falling back through the 50 sma on the 4 hour chart. Although the broader up trend seen on the daily chart remains in tact.
The pair currently trades at 1.21 testing the 20 sma on the 4 hour chart. A break through here could see the 1.2060 critical support tested prior to 1.20.
On the upside a move above 1.2160 the descending trendline resistance could pave the way to 1.2220.
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