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1 Nov 2013
EUR/USD consolidating below 1.3500
FXstreet.com (Edinburgh) - The EUR/USD is finishing a dreadful week, falling since the very beginning from levels near 1.3820 to today’s 2-week lows around the key 1.3480.
EUR/USD focus on the ECB
Next week’s ECB meeting will prove to be crucial for the single currency, as speculations regarding the imminence of an action by the central bank were mounting soon after the release of poor data from EMU’s consumer prices on Thursday. The high level of the spot in combination with a persistent disinflation would not be welcomed by the ECB, prompting investors to start pricing in a dovish tone from the statement and subsequent press conference by President Mario Draghi. “Through soft inflation, the ECB has been given the cover to reference the EUR in the context of price stability and we expect the central bank will turn far more dovish at its November 7th policy announcement and subsequently cut rates and/or announce a fresh LTRO at the December meeting”, assessed Camila Sutton, Chief Strategy at Scotiabank. The expert also expects the pair to slip back to 1.31 towards year-end and 1.25 at the end of 2014.
EUR/USD levels to watch
The pair is now retreating 0.68% at 1.3490 with the next support at 1.3472 (low Oct.16) followed by 1.3468 (50% of 1.3105-1.3833) and finally 1.3467 (low Sep.30). On the upside, a break above 1.3589 (high Nov.1) would expose 1.3641 (MA21d).
EUR/USD focus on the ECB
Next week’s ECB meeting will prove to be crucial for the single currency, as speculations regarding the imminence of an action by the central bank were mounting soon after the release of poor data from EMU’s consumer prices on Thursday. The high level of the spot in combination with a persistent disinflation would not be welcomed by the ECB, prompting investors to start pricing in a dovish tone from the statement and subsequent press conference by President Mario Draghi. “Through soft inflation, the ECB has been given the cover to reference the EUR in the context of price stability and we expect the central bank will turn far more dovish at its November 7th policy announcement and subsequently cut rates and/or announce a fresh LTRO at the December meeting”, assessed Camila Sutton, Chief Strategy at Scotiabank. The expert also expects the pair to slip back to 1.31 towards year-end and 1.25 at the end of 2014.
EUR/USD levels to watch
The pair is now retreating 0.68% at 1.3490 with the next support at 1.3472 (low Oct.16) followed by 1.3468 (50% of 1.3105-1.3833) and finally 1.3467 (low Sep.30). On the upside, a break above 1.3589 (high Nov.1) would expose 1.3641 (MA21d).