The euro dropped below 1.1160 as ECB President Mario Draghi confirmed the central bank's easing bias. The ECB stands ready to act in the light of recent financial turmoil and would pay close attention to the impact of renewed declines in energy prices as well as the ability of banks to transpose the ECB's monetary policy. Draghi said "if either of these two factors entails downward risks to price stability, we will not hesitate to act". His remarks to the European parliament indicate that the central bank could unveil further stimulus at their next ECB meeting in March. The EUR/USD traded lower in response to Draghi's statement.
Furthermore, the OMT bond buying program returns to the headlines. The Federal Constitutional Court holds again a hearing in a lawsuit against the European Central Bank's Outright Monetary Transactions program (OMT), a never-used bond buying program announced in 2012. If Germany's top judges decide that the ECB is overstepping its mandate, they could restrict the central bank's options.
The Eurozone ZEW Survey is scheduled for release at 10:00 GMT along with German ZEW Index and if figures are even lower than the expectations, the euro could accelerate its decline.
The British pound traded lower on Monday but still remained within its current trading range. U.K. Consumer prices are due for release today at 9:30 GMT and may help to determine a clear direction and increase the momentum. A sustained break below 1.4350 could drive the cable towards 1.4290, whereas a break above 1.4540 may invigorate renewed bullish momentum.
Here are our daily signal alerts:
EUR/USD
Long at 1.1186 SL 25 TP 20, 40
Short at 1.1125 SL 25 TP 35
GBP/USD
Long at 1.4430 SL 25 TP 20, 50
Short at 1.4380 SL 25 TP 25, 50
We wish you good trades and many pips!
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