EUR/CHF – ECB To Provide Details On New Policy

#OPINIONLEADER# #Signal#

 JUL 21, 2021

• ECB likely to hold monetary policy unchanged for now
• Focus of meeting will be on adoption of new policy
• Potential upside in EUR/CHF

Chart 1: EUR/CHF D1 chart

The European Central Bank (ECB) will be announcing their monetary policy decision tomorrow. With the recent review of policy allowing the central bank to target inflation at 2% as well as allowing the overshooting of inflation, the ECB will likely address its adoption in details tomorrow. As such, the focus may be shifted away from the discussion of quantitative easing (QE). Also, with the recent rise in COVID cases caused by the Delta variant across Europe, it is unlikely that the central bank will be considering QE tapering for now. Nonetheless, the ECB will likely hold its monetary policy unchanged for the time being.

If the ECB expresses any signs of optimism in terms of how the adoption of the new policy will help in the recovery of the eurozone economy, the euro may strengthen against the Swiss francs, a safe haven currency. At the moment, an Inverse Head and Shoulder pattern is close to completion. Look for buying opportunities of EUR/CHF if it breaks above the neckline.

Trade Setup for EUR/CHF (D1)

Buy Stop at 1.08800

Upcoming major news that may impact price movement of EUR/CHF

22 July – European Central Bank monetary policy announcement at 1945 (GMT+8)

22 July – European Central Bank press conference at 2030 (GMT+8)

23 July – French flash PMI data releases at 1515 (GMT+8)

23 July – German flash PMI data releases at 1530 (GMT+8)

23 July – Eurozone flash PMI data releases at 1600 (GMT+8)