Data is light on the USD this week, but the euro has a European Central Bank announcement.
EURUSD – Daily Chart
EURUSD is trading at the 1.0895 level and testing resistance levels. The week ahead will determine whether we see a correction or support.
The week ahead in the EURUSD will be dominated by the European Central Bank meeting on Thursday.
According to a Reuters poll, only 40% of respondents said the ECB president was among the top two Executive Board members they follow to inform their opinions. That means that investors prefer to follow the views of Isabel Schnabel or the Chief Economist Philip Lane.
The latest poll found that Lagarde, a former French finance minister and head of the International Monetary Fund, is not influential to investors.
“Lagarde’s speeches are very important, but they don’t capture turning points as such, or changes in signals,” said Piet Haines Christiansen, strategist at Danske Bank. “During her tenure, Schnabel and Lane have taken the role of giving strong analytical arguments for the monetary-policy stance.”
Economist favourites Knot and Nagel have been less precise by saying that the ECB isn’t on autopilot after its initial move. “Investors will be watching for signs that the much-awaited bottoming in net interest income is in hand,” said Bank of America Securities analysts.
Traders are also fixated on the Federal Reserve’s plans after a period of indecision.
“Among the national governors, Mr. Knot is my first choice,” said Kristian Toedtmann, an economist at Dekabank. “He’s clearly in the hawkish camp, but his views are well reasoned and open to argument. His assessment that monetary policy would still be restrictive even after a few more rate cuts is a good example of this”.
The week ahead will be pivotal for EURUSD.
