Forex Signals Brief for Nov 21: The ECB’s Changing Guard
Rowan Crosby • 2 min read
Yesterday, it was the FOMC that had investors on the edge of their seats. Today the attention shifts back to Europe as we get the minutes of the last ECB meeting.
While in the US, we heard that the Fed is now more evenly poised, it appears opinions are a little more mixed at the ECB. With still no clear path forward for what has been a prolonged period of weakness in the economy and soft inflation.
Importantly, these minutes will also reflect the fact that it was the last meeting with former-President Mario Draghi at the helm. Going forward the new boss Christine Lagarde will take control of the policy and messaging and as it happens she will be speaking on Friday so that will clearly be another big event for the EUR/USD.
Outside of the ECB, data is thin in the European session. However, there are concerns in the air today around the state of the trade talks between the US and China, which could well continue to weigh on risk assets as the day unfolds.
As we turn to the US session, there are a couple of data releases worth watching, including the Philly Fed Manufacturing and Existing Home Sales, but the trade sentiment will likely continue to dominate.
Forex Signal Update
The FX Leaders Team finished with one win from two signals in a relatively quiet session.
EUR/GBP – Active Signal
Our EUR/GBP is holding nicely under the 0.8600 level and price looks like it is rolling over here. We are short, looking for some more downside.
AUD/USD – Active Signal
The AUD/USD has started to get weak this morning on the back of some risk-off sentiment in the air. Price has dropped the 0.6800 level and our signal is back in the money.
BTC cannot bounce at the moment and price is really honing in on the $8,000 level.
Even the small attempts to push higher are being knocked back down. That is suggesting price is gearing up for a run at that level as there is clearly higher-timeframe selling going on here.
We’ve seen these spots fail on the first attempt so that is something to consider in terms of risk management. There is also the possibility that price could bounce to the downtrend line that we see on the chart, which would be around $8,400.
So we can look to develop a short trade around those levels. Either to sell a pullback or short the break of $8,000. Either way, we are looking increasingly bearish here.