Fundamental analytics

EUR / USD is constrained in a narrow range in anticipation of the ECB meeting


The EUR / USD pair on Thursday is trying to regain the losses of the previous trading day, but the activity of traders remains at a low level prior to the ECB meeting.


Yesterday Euro came under pressure due to tougher quarantine measures in the leading EU countries. A partial ban on the operation of bars, restaurants and other public institutions was introduced in Italy. In France, the epidemiological situation is even worse, the number of infected people is increasing by tens of thousands of people every day. Macron announced the introduction of quarantine throughout the country from October 30 to November 1. Macron also announced that the new wave of the pandemic will be more difficult and deadly than the first. The German authorities announced a partial lockdown yesterday. The new restrictive measures will take effect on November 2.


New quarantine measures could put strong pressure on economic activity in the region. The pace of economic recovery will decline significantly. Some experts do not exclude a new recession. Against this background, many investors reduced the volume of long positions in the European currency, which led to a decline in the EUR / USD pair to the 1.17 region.


Today the central event of the day will be the meeting of the European Central Bank. Most experts do not expect surprises from regulators. The interest rate is almost 100% likely to remain at 0.00%. The main market reaction can be expected during the final press conference, at which the regulator can outline further plans for changing monetary policy. Many are waiting for reports of the expansion of the QE program from December.

More restrained impact on trading may have data on the labor market in Germany and information on pending sales in the real estate market in the United States.


On the chart, buyers are trying to overcome the local resistance at 1.1755. So far they have failed. The bearish scenario remains the priority. We expect a decline in quotations to 1.1700.


· Resistance levels: 1.1755, 1.1785, 1.1865.


· Support levels: 1.1700, 1.1635, 1.1600.


The main scenario - a slight rise above 1.1755 and a decline to 1.1700.


An alternative scenario - an increase to 1.1785 and a downward reversal.


The current fundamental outlook is moderately negative. We consider shorts in the range of 1.1765-1.1785.