EURUSD: traders awaiting the ECB meeting

On Wednesday the 23rd of October, trading on the euro closed slightly up. The pair is looking for a balance point ahead of the ECB meeting and amid the ongoing uncertainty over Brexit. British Prime Minister Boris Johnson has told European Council President Donald Tusk that he doesn’t want to delay Brexit. He believes that his deal can still be approved by Parliament before the end of the month.

Day’s news (GMT+3)

• 10:30 Germany: Markit services PMI (Oct), Markit manufacturing PMI (Oct).
• 11:00 Eurozone: Markit PMI composite (Oct).
• 11:30 UK: BBA mortgage approvals (Sep).
• 14:45 Eurozone: ECB interest rate decision.
• 15:30 US: durable goods orders (Sep), initial jobless claims (18 Oct).
• 16:45 US: Markit manufacturing PMI (Oct), Markit services PMI (Oct).
• 17:00 US: new home sales (Sep).

Current situation

The pair didn’t drop to 1.1087 as expected, with 1.1110 holding firm. From there, the pair recovered to 1.1142. There don’t seem to be any growth factors ahead of the ECB meeting and Mario Draghi’s press conference to follow. This will be today’s key event. Markets are well aware that the global economy has slowed down due to the ongoing trade conflict, so no one is expecting a hawkish tone from Draghi.

Aside from the ECB meeting, traders will also have their eyes on trade talks between the US and China, Brexit, and the upcoming FOMC meeting. The forecast on today’s chart only goes as far as the ECB rate decision. Nobody knows what will happen to the euro during Draghi’s speech. With 70 hours of consolidation from the 1.1179 high, everything points towards a breakout of the 1.1110 – 1.1087 zone by the bears. This could be wrong, but for now there don’t seem to be any buy signals on the euro, no less ahead of such important events.