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Forex Strategy Video: Speculation of an ECB Move Puts EURUSD on Volatility Watch

February 5, 2014

John Kicklighter

Talking Points: ** We are heading into the ECB rate decision ( 12:45 GMT ) as speculation of more easing grows ** Rising interest rates and troubled growth will lead the ECB to weigh further rate cuts or stimulus ** EURUSD is well positioned technically for a strong rate decision reaction - one way or the other Back in November, the Euro tumbled following an ECB rate cut that was provoked by a sharp drop in inflation. Since then, price pressures have sunk further while financial risks have grown. With interest rates in the Eurozone rising, the EU's liquidity buffer for the banking system shrinking, stress tests underway, growth crawling along and troubled Eurozone members struggling despite rescue programs; the ECB has an opportunity to prevent future issues via monetary policy. Will the ECB act at this policy meeting? Whether they do or not, the impact will be felt by EURUSD and the Euro-based pairs. We discuss this event and its trade implications in today's Strategy Video.

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Source: DailyFx

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