Macro Context:
All eyes are on today’s ECB meeting, with a rate cut to 2.00% widely expected. However, the real driver of volatility will be the press conference and how the ECB frames the outlook for future rate cuts.
Markets are increasingly uncertain about how far the ECB can go with easing, caught between slowing economic growth and inflation risks that are not fully under control. If Lagarde hints at a cautious approach, the EUR could strengthen initially, putting pressure on GBP/USD in the short term.
However, any signal that the ECB remains firmly committed to further easing could trigger broad USD weakness as global rate differentials compress, ultimately benefiting GBP/USD after the initial volatility storm.
Technical Setup:
Trade Bias: Buy the Dip Before a Breakout
While the broader trend remains bullish, a short-term pullback into the support area between 1.2715 and 1.2630 would be a healthy reset before the next leg higher.
This zone could offer a strong buy opportunity, particularly if ECB uncertainty sparks short-term risk-off flows or temporary USD strength.
From there, the focus will shift back to testing the critical 1.3000 handle, with a confirmed break opening the door for an extended move toward 1.3142.
Trade Plan:
Buy zone: 1.2715 - 1.2630
Stop: Below 1.2580
Target 1: 1.3000
Target 2: 1.3142
All eyes are on today’s ECB meeting, with a rate cut to 2.00% widely expected. However, the real driver of volatility will be the press conference and how the ECB frames the outlook for future rate cuts.
Markets are increasingly uncertain about how far the ECB can go with easing, caught between slowing economic growth and inflation risks that are not fully under control. If Lagarde hints at a cautious approach, the EUR could strengthen initially, putting pressure on GBP/USD in the short term.
However, any signal that the ECB remains firmly committed to further easing could trigger broad USD weakness as global rate differentials compress, ultimately benefiting GBP/USD after the initial volatility storm.
Technical Setup:
- Key resistance levels: 1.3000 (psychological) and 1.3142
- Support zones to watch: 1.2715/20 and 1.2630
Trade Bias: Buy the Dip Before a Breakout
While the broader trend remains bullish, a short-term pullback into the support area between 1.2715 and 1.2630 would be a healthy reset before the next leg higher.
This zone could offer a strong buy opportunity, particularly if ECB uncertainty sparks short-term risk-off flows or temporary USD strength.
From there, the focus will shift back to testing the critical 1.3000 handle, with a confirmed break opening the door for an extended move toward 1.3142.
Trade Plan:
Buy zone: 1.2715 - 1.2630
Stop: Below 1.2580
Target 1: 1.3000
Target 2: 1.3142
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.