Spotlight on EURUSD Ahead of Draghi, GBP at Risk, Aussie post RBA


Tuesday projects as an eventful day for investors worldwide bringing EURUSD in the spotlight ahead of Draghi’s speech, GBP and the Aussie.

Spotlight on EURUSD Ahead of Draghi

Traders are tip-toeing today lying in wait for some fresh insights into the ECB’s monetary policy as President Mario Draghi is expected to communicate valuable information regarding inflation and/or any potential rate hikes in the opening of the ECB Forum today. This will most likely impact the EURUSD trading for a few days to come.

Investors are also keeping their eyes peeled on the news, eagerly awaiting the release of the German industrial production data, following the upbeat figures of the German factory orders, which beat economists’ expectations for September and showing a net increase of 1.0% m-o-m following a positively revised gain for August of 4.1%. These figures were supported by growing orders from the euro (6.3% higher).  Despite the encouraging outlook that these numbers may project on the EUR, Draghi has the final say.

In anticipation of the big event, EURUSD started the day around 1.15920 – 1.15879. Ahead of Draghi, the pair extended its consolidation into Asia, putting its recovery on the back burner as single currency bulls are losing impetus.

GBP at Risk

The GBP faces downside risk today and for the next few days to come, given the political uncertainty generated by the Brexit. GBPUSD retraced 50% of the BOE-prompted sell-off and is at risk of reversal to 1-month highs.

Following a defensive cling to support at 1.3030 – 1.30 levels after BOE communicated the UK policymakers’ decision, the cable surged to 1.31665 – 1.31667 on Monday, supported by the USD’s sell-off. GBPUSD now hovers around 1.31481 and lower.

Barclays analysts suggest that the Sterling faces downside risk throughout this week.

Aussie post RBA

Across the Pacific, the Aussie started the day capped by 0.77 in Asia post RBA. AUD lost momentum on the RBA’s neutral monetary policy decision. After reaching slightly above 0.77002 on Monday, the Australian currency dipped on Tuesday to 0.76950 levels and below against its greenback counterpart. AUDUSD revolves around the area of 0.76679 and slightly above at the moment.

RBA just communicated a monetary policy decision that as expected did not support any changes in interest rates but rather maintaining the current level at 1.5%.