We’re now into April European Central Bank monetary policy meeting this week by which time the ECB is unlikely to deliver a new theme. So, we’ve got a sense for how would come into April’s meeting compared to March meeting and what is clear is that we don’t expect much action from ECB.

The GDP downgrade brought in by the ECB last month has had a pretty significant impact previous month on the single currency. In March meeting, ECB lowered its 2019 GDP forecast and revised upward for EZ’s unemployment rate. On top of these, the central bank injected new stimulus launch of a new TLRO in September 2019 and ending in March 2021.

Data review:

We learned that last week’s data PMI surveys could be one of the strings for ECB to ease further. So, let’s take a closer look at that data.

Eurozone Manufacturing PMI at 47.5 in March (Flash: 47.6, February Final: 49.3) according to official data.

Eurozone Services Business Activity Index: 53.3 (Flash: 52.7, February Final: 52.8) according to official data.

Commenting on the Services PMI data Chris Williamson, Chief Business Economist at IHS Markit said: “The overall pace of economic growth will likely weaken in the second quarter as the malaise spreads to the service sector.”

Data preview:

In the euro area, our focus remains on the ECB meeting (Wednesday). We expect Mario Draghi to highlight again that the economic data remains weak than anticipated and that risks to the outlook continue to grind down.

“Incoming data had continued to be weak, in particular in the manufacturing sector. The growth outlook in the March 2019 ECB staff projections had been revised down substantially for 2019 and, to a lesser extent, for 2020.” ECB March 6-7 meeting minutes highlighted.

Danske Bank said “We expect Draghi to repeat his ‘delayed, not derailed’ message from last week – so no new policy signals from the ECB. However, we expect Draghi to strike an overall cautious tone and the ECB to keep its downside risk assessment on growth. We do not expect TLTRO3 modalities to be announced next week (only in June).”

Moody’s Analytics said, “We don’t expect the bank will unveil any major details regarding its new TLTRO programme for long-term loans in April; we expect it will do so in June, as some of the members of the bank’s governing council have suggested.”

Turning to data risk events, we will get Germany final March CPI (Thursday) and February Industrial Production on Friday.


The EURUSD ran through the target we set on Monday, up by 0.50% led by a couple of positive technical factors. The single currency traced out a near term bottom via double bottom formation between 1.1175-1.1185. Underneath the RSI has been propelling higher and the oscillator just has been turned back to bullish crossover.

The price has come close enough to the 61.8% fib reaction in early March since them consolidating between 1.1175-1.1450. From a bigger time frame perspective, the pattern is still showing a final leg down to 1.1000 levels.

Whereas the return of the dollar weakness held the respective fib reaction and trigged an impulse rise.

Now the support stands at 1.1200 followed by 1.1170. Note that any break below 1.1170 exposes further leg room to 1.1100 and 1.1000 levels.

For bulls, as long as 1.1170 is support, watch out for 1.1330 by this weekend.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

What is your Technical View?

Do you have a different idea? Please leave us a comment and get an answer from our professional analysts