Market participants are awaiting the European Central Bank decision today as well as the U.S. GDP report which is likely to show a cooling recovery.
Today’s decision has been flagged only as a stepping stone toward a far more crucial ECB decision in December. Recently, rate-hike bets have kept surging in the market and ECB officials step in to calm down rate hike repricing. Chief Economists Philip Lane warned financial markets that they are wrong to anticipate a rate hike as early as at the end of next year.
The central bank relies on its non-standard tools to support the euro area and ECB President Christine Lagarde could remind the market that the ECB is serious enough about their forward guidance amid an unlikely persisting high-inflation scenario.
The euro may face headwinds if the ECB sticks to the same script as the one at the September meeting while no large currency moves are expected. In turn, if Lagarde hints on the ECB exit strategy, we may get some kind of bullish reaction in the EUR/USD.
However, as for profitable currency movements, we do not expect today’s meeting to serve as a major driver in the market.
EUR/USD: Technically, we see a next support zone between 1.1570-60 which could limit losses. On the upside we would wait for a rise above 1.1630 in order to anticipate a leg up towards 1.1665 and possibly a run for 1.1720.
We wish you good trades!
Any and all liability of the author is excluded.
Copyright © All Rights Reserved 2021 MaiMarFX.
Follow us on social media: