Is ECB turning dovish? Another reason to fade euro
Fundamentals & Sentiment
EUR:
The euro has been strong compared to the franc as a lot of bad news for the Eurozone has already been priced in. There are already many bears on board supposedly unwinding their shorts, while the economic conditions in the EU are improving. Arguably, for the first time, the ECB started explicitly expressing possible rate cuts, while still leaving the Interest Rate unchanged. A slightly dovish tone is backed by a steady decrease in Inflation. After such a bull run since the end of February, a meaningful correction makes sense, as traders would be tempted to take profits.
CHF:
The SNB is expected to cut much less than ECB this year. Also I see CHF as a dollar proxy - I'd happy to sell euro against the buck but the risk of intervention from BoJ is present, as USDJPY is approaching 155.
Technical & Other
Setup: TR(B)
Setup timeframe: 4h
Trigger: 4h
Medium-term: UP
Long-term: Uptrend
Min target: DMA(50)
Risk: 0.41%
Entry: Limit
EUR:
The euro has been strong compared to the franc as a lot of bad news for the Eurozone has already been priced in. There are already many bears on board supposedly unwinding their shorts, while the economic conditions in the EU are improving. Arguably, for the first time, the ECB started explicitly expressing possible rate cuts, while still leaving the Interest Rate unchanged. A slightly dovish tone is backed by a steady decrease in Inflation. After such a bull run since the end of February, a meaningful correction makes sense, as traders would be tempted to take profits.
CHF:
The SNB is expected to cut much less than ECB this year. Also I see CHF as a dollar proxy - I'd happy to sell euro against the buck but the risk of intervention from BoJ is present, as USDJPY is approaching 155.
Technical & Other
Setup: TR(B)
Setup timeframe: 4h
Trigger: 4h
Medium-term: UP
Long-term: Uptrend
Min target: DMA(50)
Risk: 0.41%
Entry: Limit
Trade active:
SL at breakeven, holding over the weekends as the geopolitical risks in the Middle East are heating up
Trade closed manually:
Closed on positive ZEW data + the pair is struggling to break through the support