Today we will learn the European Central Bank’s monetary policy objectives. This week’s ECB meeting will mainly focus on adapting a new, more concise “narrative-based” monetary policy statement.

  • ECB meeting
  • technical vs fundamental analysis
  • bearish engulfing on the daily chart
EURAUD D1 – outside bar

Coming together with the ‘old’ statement, it may be difficult to read such an announcement as more dovish or hawkish than the June one. According to experts, the meeting could focus on a closer link between the path of rates and realised inflation, which would mean tolerating a temporary overshoot in inflation under the new framework.

Despite the risk that chart analysis (technical approach) to EUR pairs may be negated after the ECB announcement and everything written below can be thrown in the trash bin…. However, I was tempted to challenge the fundamental analysis and examine the chart as if there was no ECB meeting today.

EURAUD H4 – price left the bearish engulfing dynamically

On the EURAUD D1 chart an engulfing pattern ( bearish outside bar) appeared. Today, the price left this candlestick pattern at the bottom – indicating a high probability of a downward correction of the already 5-month-long upward trend.
MACD has entered a downward phase.

On the H4 chart we can notice the support and resistance level (S/R) 1.5875. It may be the supply target. MACD in a downward phase. A good level for taking a sell position would be a re-test of the defeated minimum of the mentioned outside bar, i.e. the area of 1.6000 -1.6025, if such a re-test takes place.

Of course, it is advisable to wait for the information from the ECB, which will appear after 12:30, and at 13:30 GMT+1 there will be a press conference, where we will learn the details of monetary policy in the EU.

I recommend description of the strategy used for this analysis:


ongoing analysis

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