The single currency euro is down against the USD this week as the European Central Bank (ECB) chief Mario Draghi speaking in Portugal hinted further monetary easing by the central bank despite the deposit rate being at -40 basis points (bps).
The market is totally focused on the U.S. Federal Reserve (Fed) this week, as the central bank is set to announce interest rate decision today at 18:00 GMT, and publish its projection materials that would shed light on the future path of interest rates, as well as the central bank’s forecast of GDP and inflation figures.
Draghi’s comments on further stimulus have clearly opened the door for further weakness in the single currency and the downside for EUR/USD.
Our calculations at FxWirePro suggest that the single currency is set to drift towards the 1.1 area.
Trade idea:
- Sell EUR/USD at the current rate of 1.12 and at rallies with a target of 1.095-1.10 area with the stop loss around 1.135 area.
