The last Fed meeting this year ended on Wednesday. As expected, no decisions were made by the Fed leadership regarding monetary policy. The rate remained unchanged at 1.75%.
Now the financial market participants are waiting for the publication of the decision on interest rates by the ECB. It will be published at 12:45 (GMT). The ECB press conference will begin at 13:30 (GMT). It is widely expected that ECB executives will not make changes to the current monetary policy. However, if they make unexpected statements regarding the current monetary policy, the volatility in the financial markets, primarily in the EUR/USD pair, will increase sharply.
Previous macro data provided by Eurostat indicate the need for further support of the European economy by the ECB and the continuation of its extra-soft monetary policy. As you know, at the moment the ECB's basic interest rate is 0%, and the key deposit rate for commercial banks is -0.5%.
Many economists point out that the risks to the European economy in the 4th quarter are still biased towards the downside, based on weak data on industrial production and retail sales at the beginning of the 4th quarter.
At the same time, EUR / USD remains in a global downtrend, trading below the key resistance level of 1.1160 (ЕМА200 on the daily chart). The current correctional growth of EUR / USD is likely to be limited by this resistance level.
The first signal to resume sales will be a breakdown of the support level 1.1115 (EMA144 on the daily chart). After the breakdown of short-term support levels 1.1080 (ЕМА200 on the 1-hour chart), 1.1064 (ЕМА200 on the 4-hour chart, ЕМА50 on the daily chart) the relevance of short positions will increase sharply.
A break into the zone below the local support level 1.0995 (November lows) will indicate a strengthening of the downward trend with targets at support levels 1.0940, 1.0900.
Support Levels: 1.1115, 1.1080, 1.1064, 1.0995, 1.0940, 1.0900
Resistance Levels: 1.1160
Trading Recommendations
Sell Stop 1.1090. Stop-Loss 1.1140. Take-Profit 1.1064, 1.0995, 1.0940, 1.0900
Buy Stop 1.1140. Stop-Loss 1.1110. Take-Profit 1.1160, 1.1200, 1.1240
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