ECB meeting : Goodbye to Draghi as Lagarde assumes mantle

After eight years as the European Central Bank President, Mario Draghi’s term is due to expire at the end of the month. Draghi certainly fulfilled his pledge to do “whatever it takes” to save the Euro by rolling out aggressive stimulus measures. Although his cheap money era offered the Euro a lifeline, it failed to achieve the mandate of price stability with inflation struggling to reach the golden 2% target. With Draghi leaving at a time where the ECB Governing Council is extremely divided and Eurozone economy facing domestic and external risks, the baton will be passed on to the new President Christine Lagarde.

Given how the European Central Bank has already unleashed a series of stimulus measures from the last policy meeting, it will not be a surprise if the meeting later today ends up being a non-event. The meeting will most likely be largely ceremonial with Draghi giving one last push for the government to ramp up fiscal stimulus.

Focusing on the technical picture, the EURUSD remains bearish on the weekly charts as there have been consistently lower lows and lower highs. A breakdown below 1.1100 should encourage a decline back towards 1.1000 and 1.0900, respectively.

Commodity spotlight – Gold

There was little action in Gold this morning as prices hovered around the psychological $1490 level. Investors seem to be waiting for a fresh market-moving event or report that will impact global sentiment and this continues to be reflected in Gold’s valuation. Investors remain weary over the Brexit limbo while some are cautiously optimistic over the US-China “phase-one” trade deal. Until something fresh is brought into the picture, Gold is poised to remain range bound.

Looking at the technicals, sustained weakness below $1500 should inspire a decline towards $1470. Alternatively, a solid breakout above $1500 will most likely open the doors towards $1515 and $1525, respectively.

Commodity spotlight – WTI Oil

Oil bulls were injected with a renewed sense of confidence following the surprise drawdown in US stockpiles. WTI jumped past $55 for the first time this month on this development. While tighter OPEC production would be welcomed by Oil bulls, gains may be capped by demand side dynamics. Should concerns over slowing global growth and US-China trade tensions return, Oil bears will most likely make an unwelcome return.

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