ECB Meeting and EUR/USD Price, News and Analysis:
- ECB monetary policy unchanged as expected.
- Press conference may reveal latest thoughts on inflation and growth.
DailyFX Economic Data and Events Calendar[1]
*** Updates to Follow ***
The European Central Bank left all of their monetary policy settings unchanged today as expected.
Traders will now wait to see the ECB’s thoughts on inflation and growth slightly later in the session. Before the announcement, expectations were building that the ECB may follow the Fed’s path and start to target average inflation to allow them more flexibility and allowing them to keep interest rates lower for longer. The last Euro[2] system Staff Macroeconomic Projections, released in June, showed annual HICP inflation falling to 0.3% in 2020, from 1.2% in 2019 and rising to 0.8% and 1.3% in 2021 and 2022 respectively. The latest projections and President Christine Lagarde’s commentary on today’s decision will be heard at the ECB press conference from 12:30 GMT.
EUR/USD[3] trades near 1.1845, and little movement is expected ahead of the press conference.
EUR/USD Daily Price Chart (January – September 10, 2020)
IG retail trader shows 43.35% of traders are net-long with the ratio of traders short to long at 1.31 to 1.The number of traders net-long is 0.11% higher than yesterday and 6.88% higher from last week, while the number of traders net-short is 1.75% lower than yesterday and unchanged from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD[4] prices may continue to rise.Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current EUR/USD price trend may soon reverse lower despite the fact traders remain net-short.
