Euro Weakens ahead of ECB’s Refinancing Rate Decision, Lagarde’s Speech in Focus; Oct 29, 2020
ECB Interest Rate Decision Followed By Press Conference
The core event for the day will be ECB’s interest rate decision and Press Conference. Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future. In addition, Monetary Policy statement contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions.
Currently, Covid cases are increasing sharply across the Europe and lowered the consumer as well as business confidence too. Now markets focus on the Lagarde’s hint regarding further easing and tone of the speech; will it be positive or negative for the Euro?
Let’s see how Euro has reacted during the previous data release:
EUR/USD: The euro depreciates noticeably ahead of ECB’s interest rate decision. The pair made intraday high at $1.1758 and low at $1.1720 mark. A sustained close above $1.1746 tests key resistances at $1.1797, $1.1838, $1.1876, $1.1936, $1.1975, $1.2022, $1.2047, $1.2082 and $1.2120 mark respectively. On the other side, a sustained close below $1.1746 will target key supports around $1.1688, $1.1662, $1.1590, $1.1540 and $1.1526 marks respectively.
Take a look and do trade wisely!