FX.co ★ Trading plan as of 09/07/2017

Today, the market is waiting for the results of the ECB meeting on monetary policy, and after yesterday's surprise, which was presented to us by the Bank of Canada, no one will take any action in advance. Even American data today is less significant , since it will be released exactly when the press conference of Mario Draghi begins.

Most likely, the ECB will not make any changes, and Mario Draghi will be extremely cautious in his choice of words. The ECB has adopted a super-soft monetary policy for an extended period of time, and it's already a little monotonous. In May, only speculations that the ECB will begin to tighten monetary policy, led to a continued growth of the single European currency. However, the patience of investors may come to an end, especially if the ECB does not intend to justify their expectations. In this case, many will begin to close long positions on the euro, and it will lose its positions. The situation can only be mitigated by words about the timing and the scale of the start of the normalization of ECB's monetary policy. However, in this case, the euro will weaken anyway, but it will quickly return to its current level.

Yesterday's decision by the Bank of Canada compels us to consider the most improbable option - the ECB raises the deposit rate, or even the refinancing rate. Of course, the probability of this event is inclined towards zero, but if this happens, then the single European currency will surge upward, and quite quickly.

In connection with the increased volatility and uncertainty, traders should take very careful consideration of their trading positions, so as not to run into a surge leading to a round stop-loss. It is therefore recommended to wait out the panic, and then ask for trade deals, but if you still want to retain your position, it is possible to consider a number of variations: the first is the position for the buying: it is possible to consider the values above 1,2000, with the prospect of moving to 1.2150/1.2200; the second - the position for selling: it is possible to consider below the values of 1,1800, with the prospect of a move to 1,1700/1,1650.

In any scenario, it is worth considering the current declines and laying down the volume of deals on an increasing basis.