Shares
 
FAQs

Visit our FAQ page to find the answers to the most commonly asked questions, including how to create an account, explaining ETFs, and providing useful links, forms, and tables.

FAQs
Shares

Start investing in Australian shares the smart way. Discover ThinkTrader today.

Open Shares Account
Learn To Trade
 
Indicators & Chart Patterns

Deepen your knowledge of technical analysis indicators and hone your skills as a trader.

Find your detailed guides here
Trading Glossary

From beginners to experts, all traders need to know a wide range of technical terms. Let us be your guide.

Learn more
Knowledge Base

No matter your experience level, download our free trading guides and develop your skills.

Learn more
Learn To Trade

Trade smarter: boost your skills with our training resources.

Create a live account
Market Analysis
 
Market News

All the latest market news, with regular insights and analysis from our in-house experts

Learn more
Economic Calendar

Make sure you are ahead of every market move with our constantly updated economic calendar.

Learn more
Technical Analysis

Harness past market data to forecast price direction and anticipate market moves.

Learn more
Live Webinars

Boost your investing knowledge with our live, interactive webinars delivered by industry experts.

Register now
Special Reports

Engaging, in-depth macroeconomic analysis and expert educational content from our in-house analysts

Learn more
Market Analysis

Harness the market intelligence you need to build your trading strategies.

Create a live account
Partnership
 
Money Manager

Increase your income and get compensated for your trading knowledge with ThinkInvest, putting you in control.

Learn more
Introducing Broker

ThinkMarkets ensures high levels of client satisfaction with high client retention and conversion rates.

Learn more
White Label

We supply everything you need to create your own brand in the Forex industry.

Learn more
Regional Representatives

Partner with ThinkMarkets today to access full consulting services, promotional materials and your own budgets.

Learn more
Partnership

Plug into the next-gen platforms and the trades your clients want.

 
About ThinkMarkets
 
Sponsorships

Check out our sponsorships with global institutions and athletes, built on shared values of excellence.

Learn more
About Us

Find out more about ThinkMarkets, an established, multi-award winning global broker you can trust.

Learn more
Negative Balance Protection

Trade with peace of mind. Never lose more than what you deposited, no matter what the market conditions.

Learn more
Careers

Discover a range of rewarding career possibilities across the globe

Apply now
ThinkMarkets News

Keep up to date with our latest company news and announcements

Learn more
Trading Infrastructure

When it comes to the speed we execute your trades, no expense is spared. Find out more.

Learn more
Contact Us

Our multilingual support team is here for you 24/7.

Learn more
About ThinkMarkets

Global presence, local expertise - find out what sets us apart.

Create a live account
Log in Create account

ECB likely to repeat dovish rhetoric

Fawad Razaqzada Fawad Razaqzada 22/07/2021
ECB likely to repeat dovish rhetoric ECB likely to repeat dovish rhetoric
ECB likely to repeat dovish rhetoric Fawad Razaqzada
The European Central Bank’s eagerly anticipated policy announcement is coming up at 12:45 BST with ECB President Christine Lagarde’s press conference starting at 13:30. Investors are keen to find out what the central bank’s decision to raise the inflation target to 2% means for the immediate future of monetary policy in the Eurozone and in turn the financial markets. Lagarde has promised there will be “interesting variations and changes.” Judging by the performance of the euro in recent times, the market is expecting the ECB to maintain a dovish view on monetary policy – but how much of that dovishness is already priced in is the key question. Indeed, the bigger risk is for the euro to potentially spike higher in the event the ECB turns out to be a lot less dovish than the markets expect, although this is not our base case scenario.

A couple of weeks ago, the ECB announced a change in its strategy, allowing the central bank to tolerate inflation higher than its 2% goal when rates are near rock bottom. That is the case right now, but this does not mean the Governing Council will agree on the economic and inflation outlook – and thus on how much more bond buying stimulus is needed. ECB President Christine Lagarde has also said that “forward guidance will certainly be revisited." At the moment, the guidance says the ECB will purchase bonds for as long as necessary and will keep interest rates at current levels until the inflation outlook "robustly” converges to its goal. With the cases of the delta variant of Covid-19 rising sharply across Europe and elsewhere, you can rest assured that the central bank will not even entertain the idea of dialling back stimulus. Indeed, Lagarde has already said that her sense is that the ECB will be “maintaining favourable financing conditions in our economy," and that the ECB's Pandemic Emergency Purchase Programme (PEPP) could "transition into a new format" after March 2022, which is the earliest the programme can end.

In short, expect the ECB to remain dovish, especially if we see further sharp rises in Covid cases until the central bank’s meeting. This should keep the euro under pressure.
 
As far as the euro is concerned, well the single currency has been unable to hold any recovery attempts in recent past. The euro has been repeatedly shot down by dovish rhetoric from the ECB. As a result, the EUR/USD has broken its bullish trend line:

EURUSD
Source: ThinkMarkets and TradingView.com

The EUR/USD looked poised to drop to test the 1.1700 support level ahead of the ECB. An idea scenario for the bulls would be a drop to 1.1700 and a quick rejection to create a double bottom-like reversal pattern. For the bears, a continuation lower is what they are looking for, and acceptance below 1.1700 would be rather bearish. The next obvious support below 1.1700 is at 1.1500, a level not visited since last July.


Macro data and earnings highlights
 
Thursday
  • ECB policy decision and press conference
  • US jobless claims and existing home sales
  • US Earnings: Intel, Twitter, AT&T and Snap
  • European Earnings: Unilever, SSE
Friday
  • Retail sales from UK and Canada
  • Global flash manufacturing and services PMIs, including from Eurozone
  • Earnings: Honeywell International (US) and Vodafone (UK)
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.

Related articles:

RDDT soars: here are the levels to watch in c...

By Alejandro Zambrano

26/03/2024

Reddit Launches IPO: Can the Struggling Compa...

By Alejandro Zambrano

21/03/2024

Riding the rollercoaster: Bitcoin's record su...

By Alejandro Zambrano

12/03/2024

Non-farm Payrolls: What’s next for USD/JPY an...

By Alejandro Zambrano

06/03/2024

Golden Opportunity? XAU triggers multi-year-o...

By Alejandro Zambrano

04/03/2024

Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Back to top