The euro is under significant pressure caused by the ECB’s meeting results. Today, the euro’s drop accelerated after the publication of significant macroeconomic reports.
Thus, the eurozone revealed preliminary estimates of its GDP growth rate in the third quarter. The indicator advanced by 12.7% after a decline of 11.8% in the second quarter. Notably, the current surge turned out to be the largest since records began. On a yearly basis, the eurozone economy shrank by 4.3% beating the forecast.
Such data should have boosted the single currencies. However, the eurozone economic slump looks alarming compared to the US. That is why the GDP report only slightly improved investors’ sentiment.
The eurozone inflation figures are also quite positive. In October, the indicator inched up by 0.2%. However, consumer prices have been dropping for three months in a row. This is an extremely negative factor. Moreover, yesterday, Christine Lagarde hinted that low inflation could result in a softer monetary policy. In other words, such a rise in the eurozone inflation is not enough to make the euro more attractive for investors.
Yesterday, the euro/dollar pair broke the support level of 1.1700 to reach the next support level located at 1.1650. After that, the pair showed a rise. According to the market sentiment, we can say that bears’ target is to reach the low of 1.1650 logged yesterday. If the euro/dollar
pair fixes below the mentioned level, it may fall even deeper to 1.1612 (*).
According to the alternative scenario, the pair may reach the level of 1.1695 that will lead to the fluctuation between 1.1690 and 1.1720.
At the same time, the pound/dollar pair continued falling and broke the local low of 1.12916. That is why the pair may hit the range of 1.2840/12860 that acts as the main support level.
On the chart, we can see that the pair got stuck between the levels of 1.2900/1.2940. If the price fixes below 1.2880, it may decline to 1.2840.
Most short deals are likely to be opened after the fixation below 1.2840 on the four-hour chart. Otherwise, the pound/dollar pair will rebound.
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