Over the last couple of weeks, we have seen quite a few central bankers coming in and driving the forex market.
They have been sending a lot of signals, mostly hawkish, although Mario Draghi of the ECB (European Central Bank) and Mark Carney of the BOE (Bank of England) have been trying to keep the euphoria in check.
Draghi gave a speech yesterday in Lisbon and he´s giving another one now. Yesterday, the market was expecting some hawkish comments from him, after hearing last week that the Eurozone economy has a good momentum going, which Merkle backed as well.
But Draghi stressed that there won´t be any interest rate hikes anytime soon. Consequently, Euro pairs took a dive yesterday in the afternoon.
Today though, it seems like the pressure is on the top side. Draghi started his speech a few minutes ago and EUR/USD has already jumped about 60 pips higher.
I don´t see/hear anything particularly hawkish in his comments so far in relation to rate hikes, but he´s acknowledging the better economic conditions, so that must be the reason for this jump in Euro pairs.
Although, I don´t trust this move because EUR/USD will dive just as quickly if we see a dovish comment about interest rates, which could come at any minute in my opinion. At the time we´re staying clear of EUR/USD, and we should probably concentrate on USD/JPY and GBP/USD because I see a couple of trade setups there. We will talk about them in the next forex update.
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