EUR / USD is under bearish pressure, but found some support just below 1.0700 as risk sentiment investors are not very bright, and the demand for euro lower results improved compared to the demand for US dollars.
The European Central Bank is ready to ease policy in the near future. ECB head Mario Draghi stated that the strong euro accounted for euro area inflation outlook weak. Next week Mr. Draghi will speak 2 times - on Mondays and Fridays. As head of the dovish regulator so far, we think that he will continue to stick in this line, so that speeches are bearish risk for the euro. German economic growth has slowed slightly in Q3. The same thing happened with the euro area economy. The news is quite negative.
Apart from Mr. Draghi's speech next week watch the euro area inflation in late October on Monday and Monday ZEW economic sentiment for Germany and the euro area on Tuesday. Data from the US would be also important for the couple.
Large speculators significantly increase net short positions on the euro in recent weeks, the market has become more bearish, and the risk of closing short positions suddenly now higher. However, the level of 1.0900 / 50 - the support line 2015 - is a strong resistance to the single currency, and which never reached will trigger a new wave of selling. Support is located at 1.0700, 1.0660, 1.0600 and 1.0520. As, for the moment, we have probably seen most of the decline of this couple in the monetary difference between the US and the euro area, the rate of decline is likely to slow and the EUR / USD has several reasons to stabilize and consolidate a little.
The European Central Bank is ready to ease policy in the near future. ECB head Mario Draghi stated that the strong euro accounted for euro area inflation outlook weak. Next week Mr. Draghi will speak 2 times - on Mondays and Fridays. As head of the dovish regulator so far, we think that he will continue to stick in this line, so that speeches are bearish risk for the euro. German economic growth has slowed slightly in Q3. The same thing happened with the euro area economy. The news is quite negative.
Apart from Mr. Draghi's speech next week watch the euro area inflation in late October on Monday and Monday ZEW economic sentiment for Germany and the euro area on Tuesday. Data from the US would be also important for the couple.
Large speculators significantly increase net short positions on the euro in recent weeks, the market has become more bearish, and the risk of closing short positions suddenly now higher. However, the level of 1.0900 / 50 - the support line 2015 - is a strong resistance to the single currency, and which never reached will trigger a new wave of selling. Support is located at 1.0700, 1.0660, 1.0600 and 1.0520. As, for the moment, we have probably seen most of the decline of this couple in the monetary difference between the US and the euro area, the rate of decline is likely to slow and the EUR / USD has several reasons to stabilize and consolidate a little.
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