Further dynamics in the EUR/USD pair will be determined by the ECB interest rate decision and comments regarding prospects of the EU . Analysts suggest that interest rate will remain unchanged, but the ECB may expand its quantitative easing programme. At the same time, investors avoid to open short positions as the ECB President has recently stated that the effect of the quantitative easing programme has exceeded all expectations of the regulator.
Support and resistance
A correction has started in mid-October. The 50.0% Fibonacci is seen as a strong as it is near the lower MA of
If the ECB continues its quantitative easing programme, the correction will finish and a strong “bearish” trend will form. The pair will break down the of 1.1299 and continue declining to 1.1254, 1.1106. Otherwise, if the regulator refuses to expand the programme, a growth will follow. Thus, two scenarios are possible.
Short positions can be opened from the level of 1. 1290 with the target at 1.1254-1.1106.
Long positions can be opened from the level of 1.1345 with the target at 1.1402.
After either of the scenarios works out, set a trailing stop and wait for further developments.