Good morning Traders......
So today is the day we have been gearing up to all week, the ECB meet to discuss a possible interest rate cut and Draghi will host a press briefing to discuss the well-being of the Eurozone, these days can bring an element of uncertainty and volatility into the market place so it is advised to trade with caution during the morning session.
Yesterday we saw another sell off in the European session, followed by a bounce in the US session however we still remain confined within our interm trading range ($SPX 1498-1515). These levels have been very well protected and as long as the $SPX can remain above the 1500 level we are very much continuing the short term bull trend. As a trader it has to be noted that a correction is not far away and it would prove healthy for equities to retrace from the highs and allow technical indicators to neutralise before moving higher on the back of a resolved Fiscal Cliff deal.
So what should we be looking our for in the markets this morning?
The ECB is widely expected to leave its key lending rate unchanged at its historic low rate of 0.75%, on the back of this expectation we have seen Gold move higher during the Asian trading session. IT is interesting to note that if Mario expresses no resistance to further $EUR gains after the policy meeting, markets may bring the $EURUSD pair higher. In early market trading we have seen a significant move to the upside in the pair and I think we will remain range bound until the announcement later this afternoon.
Traders will also be keeping a close eye on Draghi's view on the euros strength against its pairs, and its potential affect on the recovery process and this could prove to be more important then the decision itself in trading this afternoon, with clarity brings direction.
Happy Trading
@lowkeycapital
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