The European regulator left interest rates unchanged, while Mario Draghi underlined the growing risks to the economy of sluggish inflation and slower economic growth in the Eurozone.
Day’s news (GMT 3):
- 11:00 Germany: IFO – business climate (Oct), IFO – expectations (Oct), IFO – current assessment (Oct).
- 17:00 US: Michigan consumer sentiment index (Oct).
- 20:00 US: Baker Hughes US oil rig count.
The bears were 6 pips short of covering the volume profile from the 17th of October. We expect a test of the 67th degree at 1.1083. The trend line runs just below this level, so it’s unlikely to be broken at the first attempt. The LB balance line runs through 1.1120. We expect a downwards reversal to start from the 1.1120 – 1.1125 followed by a decline to 1.1083. After yesterday’s engulfing of the bullish candlesticks, buying the euro does not look like an attractive prospect.
The macro-economic events calendar is empty today. If anything is going to produce some movements, it will be the German IFO reports. These have an effect on the euro if the actual figures differ strongly enough from the predictions.