Short-term interest rate markets currently see a 100% chance of the ECB keeping rates unchanged at the October 26th meeting. The terminal rate is seen as being around the current level of 4%. The question is will the ECB recognise that perhaps they need to look at when they will cut rates? With headline inflation still well above the ECB’s target calls for cuts will be premature, and rising oil prices are inflationary pressures, but watch the EURUSD into the meeting. If the USD starts following the move in yields higher the EURUSD pair could see weakness heading into the ECB meeting.
The reaction of the EURUSD on the day before and on the day of the meeting shows a bias towards selling. Over the last 15 years, the US dollar pair has lost value over 55% of the time with a maximum fall of 3.47% in 2011.
Major Trade Risks:
The major trade risk here is if the ECB gives a more hawkish message that will likely support the EURUSD higher. Also, any unexpected USD weakness can support the EURUSD pair.
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular ...
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular financial instrument, group of securities, segment of industry, analysis interval or any particular idea, approach, strategy or attitude nor provides consulting nor brokerage nor asset management services. seasonax GmbH hereby excludes any explicit or implied trading recommendation, in particular, any promise, implication or guarantee that profits are earned and losses excluded, provided, however, that in case of doubt, these terms shall be interpreted in abroad sense. Any information provided by seasonax GmbH or on this website or any other kind of data media shall not be construed as any kind of guarantee, warranty or representation, in particular as set forth in a prospectus. Any user is solely responsible for the results or the trading strategy that is created, developed or applied. Indicators, trading strategies and functions provided by seasonax GmbH or on this website or any other kind of data media may contain logical or other errors leading to unexpected results, faulty trading signals and/or substantial losses. seasonax GmbH neither warrants nor guarantees the accuracy, completeness, quality, adequacy or content of the information provided by it or on this website or any other kind of data media. Any user is obligated to comply with any applicable capital market rules of the applicable jurisdiction. All published content and images on this website or any other kind of data media are protected by copyright. Any duplication, processing, distribution or any form of utilisation beyond the scope of copyright law shall require the prior written consent of the author or authors in question. Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
