empty
15.04.2025 12:35 AM
ECB Meeting: What to Expect?

This image is no longer relevant

This week, the European Central Bank's meeting in April is happening, and the euro is in high spirits. The euro has been doing exceptionally well for at least two months—seemingly without much effort. In other words, if you look solely at the economic data from the Eurozone, I wouldn't predict even a 200-pip rise. Yet, over the past two months, the euro has gained 1000 points—all thanks to the U.S. president.

Under the current circumstances, the only realistic expectation from the ECB is another interest rate cut. Inflation is slowing, and the threat of recession due to Donald Trump's tariffs is growing. Therefore, the ECB can combine the pleasant with the useful. Let me remind you: economic stimulus requires low interest rates, and when inflation is declining, there's no need for high rates. Consequently, the ECB is likely to launch another round of monetary easing. These are not the best possible news for the euro, but it hardly matters in the current environment. The market is ready to invest in any currency — as long as it's not the dollar. Whether the ECB cuts, raises, or leaves rates unchanged, the euro's direction will depend entirely on how the global trade war unfolds.

Trump kicked off the new week with enthusiasm by announcing new tariffs, this time targeting all semiconductors. It's still unclear whether Washington and Beijing are tired of raising tariffs against each other every day. It's also unclear what other all-encompassing tariffs Trump is preparing in addition to those on automobiles, steel, and aluminum. There are enough flashpoints in this trade war to expect more surprises.

This image is no longer relevant

Considering all this, I expect further growth in EUR/USD quotes, even though the current wave count is starting to look unreadable due to the one-sided market movement. Wave 2 in the correction is smaller than the internal corrective waves in Wave 1. And for now, the market isn't showing signs of stopping or ending the dollar sell-off.

Wave Analysis of EUR/USD:

Based on the analysis of EUR/USD, the pair continues to build a new bullish trend segment. Trump's actions have reversed the downward trend. Therefore, the wave structure will soon depend entirely on the U.S. president's stance and actions. This must constantly be kept in mind. From a wave perspective, we should now expect the formation of a corrective wave set, which typically consists of three waves. However, Wave 2 may already be complete. If this assumption is correct, Wave 3 of the upward trend has begun, with potential targets reaching the 1.25 area.

This image is no longer relevant

Wave Analysis of GBP/USD:

The wave picture of GBP/USD has changed. We are now dealing with a bullish, impulsive segment of the trend. Unfortunately, with Trump in office, markets may face countless shocks and reversals that do not align with wave structure or technical analysis. Therefore, at this point, a corrective wave pattern should be expected, the size of which will also depend on Trump. After that, we can anticipate the construction of an upward Wave 3 — but only if Trump's stance on trade policy does not suddenly do a complete 180, which there are currently no signs of.

Core Principles of My Analysis:

  1. Wave structures should be simple and understandable. Complex patterns are difficult to interpret and often bring about sudden changes.
  2. If you're uncertain about the current market situation, it's better not to enter a position.
  3. You can never have 100% confidence in price direction. Always remember to use Stop Loss orders.
  4. Wave analysis can be combined with other forms of analysis and trading strategies.
Chin Zhao,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

The Market Took a Step Back

The longest winning streak of the S&P 500 in two decades has come to an end. But who's responsible? The Federal Reserve, which plans to keep rates unchanged

Marek Petkovich 10:16 2025-05-06 UTC+2

Markets Anxiously Await the Fed's Monetary Policy Meeting (Potential for Renewed Growth in Bitcoin and #NDX)

Markets remain tense. The U.S. Dollar Index and the cryptocurrency market are stagnating, caught between opposing forces. Investors are tensely awaiting the outcome of the Federal Reserve's monetary policy meeting

Pati Gani 10:02 2025-05-06 UTC+2

GBP/USD Overview – May 6: Trump Goes After the Film Industry

The GBP/USD currency pair traded upward during the first half of Monday and downward during the second half. While the U.S. dollar didn't lose much this time, its brief attempt

Paolo Greco 07:04 2025-05-06 UTC+2

EUR/USD Overview – May 6: The Protest Against Donald Trump Continues

The EUR/USD currency pair began a new upward cycle on Monday. At this point, no one is likely surprised by another drop in the U.S. dollar. The market started selling

Paolo Greco 07:04 2025-05-06 UTC+2

What to Pay Attention to on May 6? A Breakdown of Fundamental Events for Beginners

There are very few macroeconomic events scheduled for Tuesday. In the Eurozone and Germany, the second estimate of April's services PMI will be published, but these are unlikely to attract

Paolo Greco 05:49 2025-05-06 UTC+2

Fed Rate Cut Probability Is Near Zero

This week marks the third Federal Reserve meeting of the year. At the first two meetings, monetary policy parameters remained unchanged, and there is virtually no chance of a rate

Chin Zhao 00:50 2025-05-06 UTC+2

The Dollar Sell-Off Shows No Signs of Slowing Down

The latest CFTC report reveals that the dollar sell-off continues unabated. Weekly changes against major currencies amounted to -$3.1 billion, bringing the total accumulated short position to -$17.1 billion

Kuvat Raharjo 00:50 2025-05-06 UTC+2

GBP/USD. The Pound and Politics

The pound reacted negatively to the results of the local elections in the UK, where the right-wing Reform UK party secured a convincing victory in many districts. However, the British

Irina Manzenko 00:50 2025-05-06 UTC+2

XAU/USD. Analysis and Forecast

Gold continues to show resilience, climbing above the key psychological level of $3300. Geopolitical tensions stemming from the prolonged Russia–Ukraine conflict and escalating hostilities in the Middle East continue

Irina Yanina 17:45 2025-05-05 UTC+2

USD/CHF: Analysis and Forecast

The USD/CHF pair remains under pressure at the start of the new week, attracting sellers for the second day in a row, weighed down by several factors. However, spot prices

Irina Yanina 17:35 2025-05-05 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.