The ECB meeting was held on Thursday, the main event for the EURUSD for this week and probably even for the month.
What has the ECB decided? Rates remained at an extremely low level with the base rate of 0%, and – 0.5% for bank deposits. The QE program also remains unchanged at 20 billion euros per month. If there were any changes, that is the ECB’s initiation of a “strategy review.”
There is only one way the ECB can revise its strategy, which is by tightening its monetary policy. Experts have been emphasizing for a long time that the super-soft policy of the ECB has long been spent and does not give an impact.
At the same time, the risk for the ECB is that a new Big Crisis will come when ECB rates are already at lows which may result in it from losing tools to help the economy get out of the crisis.
It would seem that the ECB’s decision was to push the euro up, and somehow we saw some growth attempts, but in the end, the euro still fell.
If you look at weekly or monthly long charts, you can see that there has been a reversal to the euro where the last minimum the EURUSD had was a long time ago which is last October 1, 2019, with 1.0880. Right now, we are probably inside the big reversal figure for the euro and the new “bottom” can be both at 1.0980 and at 1.0880.
Another event to anticipate is the Fed meeting on January 29, where there is a small probability that the Fed will change the rate, however, surprises tend to happen.
We sell from 1.1070.
We buy from 1.1110.