The European Central Bank released its interest rate decision this morning at 7:45 AM ET (GMT-5), and the bank has decided to maintain a 0.05% rate.
This decision has already had its effect on the euro pairs, causing great strength for this currency across the board (as seen in the charts below).
What this announcement means
As seen in the charts, this announcement led to the creation of +2,338 pips in 2 hours for these EUR pairs.
Our own Joshua Martinez states,“Usually after a large move like this we see a very large pull back so we can really help our students and future traders generate a nice return. The pull backs last between a few hours and a few days but I would say that if we see the similar movements like past major announcement pull backs we should be able to generate around another +1,000 Pips.”
Usually if the ECB is hawkish about the inflationary outlook of the economy and raises the interest rates, this is seen as positive, or bullish, for the euro. Likewise, if the ECB has a dovish view on the European economy and keeps the ongoing interest rate, or cuts the interest rate, it is seen as negative, followed by bearish moves in the euro.
Martinez adds that this rate announcement serves as a great sign of continued volatility for the rest of the year — and experienced traders know that volatility is what you want to generate both pips and profits.
The time is now
If you aren’t excited by this news, you probably don’t know enough about Forex trading, but that’s okay — it’s our business to help you understand how an announcement by the European Central Bank could mean more money in your pocket.
If you’d like to learn more about how to trade foreign currency in the Forex market and major market moves like this one, you owe it to yourself to register for one of our free webinars immediately, using the form below…