The European Central Bank’s current stance for September is to maintain policy rates. Any proposal for a rate cut in the upcoming meeting would need to overcome a high threshold. For a rate cut to be considered, economic data would need to worsen, and projections would need to be lowered further.<\/p>\n
During Lagarde’s press conference, the EUR\/USD dropped to 1.1729 but then climbed back up. It reached a peak of 1.1788, revisiting highs from early July, specifically 1.17894 on July 7 and 1.1787 on July 6. If surpassed, the next targets would be 1.1808 and 1.1830 from July 3 and July 1.<\/p>\n
For those optimistic about the recent EUR\/USD increase, a decline through the 1.17529 to 1.1769 range would be a setback. Breaking this swing area might weaken the current bullish sentiment.<\/p>\n
Based on the baseline of no policy change, we believe derivative traders should position for Euro strength against the US dollar. The high bar for a September rate cut provides a solid floor for the currency. This policy stance is supported by recent data showing Eurozone core inflation unexpectedly rose to 2.9% in May, making it difficult for officials to justify easing.<\/p>\n
This contrasts with the situation in the United States, where softer data, such as the unemployment rate rising to 4.0%, gives its central bank more reason to consider rate reductions. Futures markets are currently pricing in over a 60% probability of a US rate cut by September, creating a clear policy divergence that favors a higher EUR\/USD. For derivative traders, this suggests buying call options to capitalize on this expected upward trend.<\/p>\n
The strong rebound following the press conference indicates bullish market conviction. A decisive break above the 1.1789 resistance level would be our signal to add to long positions, as it would clear a multi-week high and target the 1.1830 area. This move could see an increase in implied volatility, making options strategies more attractive.<\/p>\n
We must also define our risk by watching the support between 1.1752 and 1.1769. A break below this zone would signal that the bullish momentum has failed, and we would use this as a trigger to reduce long exposure or purchase protective put options. Historically, a sustained move above the 1.1830 level has often preceded larger, multi-week advances.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" ECB holds rates; rate cuts unlikely without worsened data. EUR\/USD rebounds, eyes key July resistance levels.<\/p>\n","protected":false},"author":62,"featured_media":17021,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-27203","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/27203","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=27203"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/27203\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17021"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=27203"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=27203"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=27203"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}