ECB Rate Cut

Markets are basically on hold awaiting the ECB rate cut decision expected on Thursday. Policy makers are reportedly debating a cut of 10-15 basis points in both the benchmark lending and deposit rates, which – for the deposit rates – would take the level into negative territory. Economists expect the ECB to lower its inflation forecast significantly from March’s 1% estimate, and this wouldn’t even take into account yesterday’s May data which showed inflation slowing to its lowest level in four years.

Tuesday’s trading session was a Narrow Range Inside Day…So balanced two-sided consolidated trade characteristics as investors/traders await key economic releases this week. Key price boundaries remain 1916 on low end and 1923 on upper end. Price is so “coiled-up” within an extremely tight ADR (5) of just 8 handles, it is like a Cobra Snake ready to strike out!  Don’t Get Bitten…REMAIN VIGILANT and DISCIPLINED.

Since yesterday was an Inside Day, price target calculations will be based upon the two-day range. IF price can penetrate and convert 1923.00, THEN upside price targets 1924- 26 zone with layered projections 1927.50…1929 – 1931 zone. Violation of 1916.00 targets downside 1912 – 14 zone, extending down 1910 – 1908, with extremes measuring 1905 – 1903 zone.

Trade Strategy will continue to focus on trading within recent range at price edges highlighted until there is a directional breakout of consolidation. “Buy Dips…Sell Rips”.

Focus on Efficient Trading Practices….ALWAYS USE STOPS!

Good Trading…David

Habitude Six
I am at peace with uncertainty. I know there is no such thing as a sure thing. I have no particular need to be right. I understand that being perfect has no place in trading. I am flexible. I am willing to change my mind. I am alert to scenario changes. I accept the information that tells me I am on the right track or on the wrong track.

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