Fundamental analytics

EUR / USD increases in response to ECB meeting

EURUSD

The pair EUR / USD on Friday maintains positive dynamics, reacting to the results of the ECB meeting held on the eve.

Following the meeting, the regulator decided to reduce the interest rate by 0.1% and resume the QE program. From November 1, the ECB will resume the purchase of bonds for 20 billion euros per month. This decision led to the weakening of the European currency to the minimum of the current year around 1.0925. But after a press conference by Mario Draghi, the EUR / USD pair resumed growth, which continues today. In his speech, Draghi noted that the likelihood of a recession remains low, as well as parried criticism of Donald Trump, saying that the ECB will not deal with the competitive devaluation of the currency. But, in our opinion, the main driver of the growth of quotes was the absence in Draghi's speech of any hints regarding further easing of monetary policy. Earlier, some investors had expected the ECB to cut interest rates by 0.2% and to resume the asset buyback program in the amount of EUR 40 billion per month.

Today in Europe there are no important economic reports, therefore in the morning the main driver of the movement on the market will be the news of geopolitics, primarily related to Brexit and the situation in world trade. During the American trading session, the main focus of attention will be directed to the publication of the report on US retail sales for August.

On the chart, the currency pair overcame resistance at 1.1085. This is a good bullish signal, which makes the next target for price movement the level of 1.1155.

Resistance levels: 1.1155, 1.11225, 1.1280.

· Support levels: 1.1065, 1.030, 1.0965.

The main scenario is almost recoilless growth from current levels to 1.1155.

An alternative scenario is a rollback to the area of ​​1.1065 and an increase to 1.1155.

A positive fundamental background locally prevails on the market. Bullish signals dominate the chart. Short-term preference is given to longs, which should be considered near the level of 1.1065.