EUR/GBP – ECB Not Ready For QE Tapering

#OPINIONLEADER# #Signal#

 SEP 9, 2021

• QE tapering unlikely to happen
• ECB may start tapering discussion
• Straddle pattern in EUR/GBP (D1)

Chart 1: EUR/GBP D1 chart

The European Central Bank (ECB) will be announcing its monetary policy decision today. With the Delta variant still posing a threat to public health in the eurozone, it is unlikely that the central bank will be tapering its Pandemic Emergency Purchase Programme (PEPP) that soon. Although eurozone inflation has risen to a 10-year high recently, the ECB is likely going to downplay it, claiming it to be transitory. Hence, it is also unlikely that the central bank will be tapering its Asset Purchase Programme (APP).

Nevertheless, the central bank may start its discussion on future tapering of the PEPP or APP. This creates potential volatility in EUR/GBP for breakout trading opportunities after having trading within a 70 pips range for more than two weeks.

Trade Setup for EUR/GBP (D1)

Buy Stop at 0.8630

Sell Stop at 0.8530

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

09 September – European Central Bank monetary policy meeting at 1945 (GMT+8)

09 September – European Central Bank press conference at 2030 (GMT+8)

10 September – European Central Bank President Lagarde speaking at 1730 (GMT+8)

14 September – UK employment data release at 1400 (GMT+8)

15 September – UK CPI y/y data release at 1400 (GMT+8)