News & Analysis

Chart of the Day: Tuesday 18th June

June 19, 2019

An important morning in the Eurozone today and that is being reflected in the currency as we see it back below the 1.12 handle.

As ECB President Mario Draghi took to the stand to give his speech, he commented on the risk outlook of the Eurozone, stating that it “remains tilted to the downside” and going on to say that if the outlook doesn’t improve then more stimulus will be needed. This including further interest rate cuts and a continuation of the asset purchase program started in 2015, known as Quantitative easing.

On the back of this, we saw the EURUSD experience a sharp leg lower, where we are currently seeing the price being supported by the monthly pivot level shown on the chart.

In other markets, we are also seeing European bonds rally due to the commitment to further stimulus from the ECB, this extending the demand for these bonds, as the ECB is one of the biggest purchasers of European sovereign debt as part of its asset purchase programme.

The news is also having a positive impact on the European indices with the Euro Stoxx 50, CAC40 & Dax Indices all up on the day by at least 1%.

As the market prices in the expected rate cut, there is own person who seems particularly unhappy with the comments made today by Mario Draghi. That would be none other than Twitter’s, unfortunately, most active world leader, President Donald Trump, who took to the social media to complain about the weakening Euro making it “unfairly ease” for the Eurozone to compete with the United States. It remains to be seen whether we could see retaliatory action from the president on this.


Sources: Go Markets, Meta Trader 5, TradingView, Bloomberg

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