EUR/USD: Levels, Ranges, Targets

Takes a massive amount of attempts to obtain necessary central bank trade data on Central Bank meet days. All those late to the meeting come at one time and severely overload the system. Offers a grand assessment how the FX experts handle central bank meet days.
The BOE by far is the toughest of all the central banks while the RBA and RBNZ remain easiest of all central banks. Bank of Canada can be rough if the meeting appears to result in an interest rate change otherwise the BOC is easy. The Federal Reserve is a breeze. The BOJ is fairly easy while the SNB is like the BOC. If an expected interest rate change is upon us then the SNB can be rough. What separates the central banks in meet days is the times to trade, the times to factor the data, the times when the data is old and worthless and the times when the data is hot off the presses. The late comers to today’s ECB meeting should’ve been prepared long before as I am on this day. If traders were in charge of exchange rates, below is how the ECB views this day.
EUR/USD. First is the ECB blocks exchange rates. Today the range is blocked by 251 pips from 1.0660 to 1.0409. The ECB from Sunday’s open is offering 2 additional pips on this day as the range for the week was 249 pips from 1.0746 to 1.0497. Must consider, we are still dealing under break points. An actual range break isn’t found until 1.0729 then the bottom range at 1.0300’s.
The ECB dropped the topside to allow the bottom to rise. Central banks are most unfriendly to exchange rates because they despise movements unless they have an overall target in their economic game plan. Sept 2014 was the perfect example for the ECB when they went negative interest rates. By blocking the topside, the ECB message is focus on the downside as this is the overall trend and ECB intent.
On the topside, Draghi must speak in radical terms to see 1.0660 today. We are looking at sell points starting at 1.0597, 1.0602 to 1.0605. The best Draghi can take us to 1.0660 is 1.0630 and 1.0645. These upper points are not expected today but again a redical remark to see 1.0630 then we’ll sell higher back near 1.0605 with focus on a 1.0597 break below. EUR/USD breaks higher by 1.0557 and 1.0571.
While 1.0409 is the vital break below, 1.0406 reinforces 1.0409 then 1.0396. Today, we are looking at 1.0479 and 1.0465 to contain any drops. We arrive at this destination by breaks at 1.0529, 1.0510, 1.0507 and 1.0495.
Current sits on a big base at 1.0340’s and 1.0224.


Brian Twomey


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