EUR/USD At A Psychological Level Of 1.2500

It seems that the euro is moving sideways around the psychological critical level of 1.2500. As mentioned yesterday, all eyes are on the ECB meeting and its outputs.

The dollar, on the other hand, is still showing signs of strength supported by positive U.S. financial data.

Be prepared today for a high volatile market, starting with the ECB meeting and continuing till the release of the NFP.

Here are the major Resistance (R) & Support (S) levels of the EUR/USD:


S2 1.2385
S1 1.2460
Pivot Point 1.2510
R1 1.2560
R2 1.2643

As for today’s figures, starting from the UK; the Manufacturing Production announcement will be released at 9:30 GMT; measuring the change in the total inflation-adjusted value of output produced by manufacturers. Manufacturing accounts for approximately 80% of the overall Industrial Production.

Ø Forecast: 0.3%
Ø Previous: 0.1%

A higher than expected reading should be taken as positive for the GBP, while a lower than expected reading should be taken as negative for the GBP.

Another high impact data to be released at 12:00 GMT is the official bank rate for the GBP. Bank of England (BOE) monetary policy committee will vote on the interest rate. Traders watch interest rate changes closely, as short term interest rates are the primary factor in currency valuation.

Ø Forecast: 0.50%
Ø Previous: 0.50%

A higher than expected rate is positive for the GBP, while a lower than expected rate is negative for the GBP.

Moving to the EU, at 12:45 GMT, the euro’s minimum bid rate will be announced. The six members of the European Central Bank (ECB) Executive Board and the 16 governors of the euro area’s central banks will vote on where to set the rate.

Ø Forecast: 0.05%
Ø Previous: 0.05%

A higher than expected rate is positive for the EUR, while a lower than expected rate is negative for the EUR.

After the Euro’s interest rate announcement, at 13:30 GMT, the European Central Bank (ECB) press conference will be held. It is a monthly press conference held 45 minutes after the Minimum Bid Rate announcement. This conference is an hour long and divided to two parts. First, a prepared statement is read, and then the conference is opened for press questions.

The press conference examines the factors which affected the ECB's interest rate decision and deals with the overall economic outlook and inflation. Most importantly, it provides clues regarding the future monetary policy.

High levels of volatility can frequently be observed during the press conference, as press questions lead to unscripted answers.

At the same time, the Nonfarm Productivity announcement is scheduled for release today at 13:30 GMT from the U.S. It measures the annualized change in the labor efficiency while producing goods and services, excluding the farming industry. Productivity and labor-related inflation are directly linked-a drop in the workers’ productivity, which is equivalent to a rise in their wages.

Ø Forecast: 1.5%
Ø Previous: 2.3%

A higher than expected reading should be taken as positive for the USD, while a lower than expected reading should be taken as negative for the USD.

Moving to Canada, the Ivey Purchasing Managers Index (PMI) will be released, measuring the activity level of purchasing managers in Canada. It is a joint project of the Purchasing Management Association of Canada and the Richard Ivey School of Business.

A reading above 50 indicates expansion; however, a reading below 50 indicates contraction.

Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of the overall economic performance.

Ø Forecast: 57.0
Ø Previous: 58.6

A higher than expected reading should be taken as positive for the CAD, while a lower than expected reading should be taken as negative for the CAD.


Disclaimer: Forex trading is not suitable for everyone as it contains a risk of losing your investment. This article shall not be handled as a recommendation, as it’s to assist our followers and readers for a better understanding of the market movements.