The EUR stood near a three-month low ahead of a European Central Bank decision (rate announcement: 11:45 GMT, press conference: 12:30 GMT). Today’s Q&A session will be closely scrutinized in the wake of recent tapering speculation. Top ECB officials denied the Governing Council discussed a possible tapering of asset purchases. Therefore, we cannot expect ECB President Mario Draghi to add much on this topic. We also doubt he will drop explicit hints about the Governing Council’s current thinking of additional stimulus: that would be premature without full information from the committees and before the updated projections. While a majority of the ECB likely favours an extension of QE beyond March 2017 there are a handful of hawks that are likely not convinced of the need to continue with QE. We think Draghi will just stress that the central bank remains committed to do whatever is needed to meet its price mandate.
If there is no hint on a possible extension of asset purchases beyond March 2017 at today’s ECB press conference, the EUR/USD could find its way back to the area of 1.1085-1.1140. But if Draghi puts greater emphasis on the need for more stimulus, further drop in the EUR/USD is likely.
Daily low on October 19 at 1.0955 and daily low on July 25 at 1.0952 are the nearest support levels. We do not expect they will be broken before the ECB statement.
GrowthAces.com - Daily Forex Trading Strategies
If there is no hint on a possible extension of asset purchases beyond March 2017 at today’s ECB press conference, the EUR/USD could find its way back to the area of 1.1085-1.1140. But if Draghi puts greater emphasis on the need for more stimulus, further drop in the EUR/USD is likely.
Daily low on October 19 at 1.0955 and daily low on July 25 at 1.0952 are the nearest support levels. We do not expect they will be broken before the ECB statement.
GrowthAces.com - Daily Forex Trading Strategies
