ECB President-Elect Christine Lagarde has indicated in her presentation to the EU Parliament, her desire to carry on with the policies of outgoing President Mario Draghi. She has also indicated her willingness to push EU-wide fiscal expansion.
It is still unclear how she intends to unite an ECB board that is deeply divided on the issue of further stimulus packages. The ECB meets next week in what is expected to be the D-day for an announcement on the bank’s planned stimulus package.
The Euro has been weighed down by concerns over the global economy and also by expectations of quantitative easing by the ECB.
The EURUSD is staging a recovery after taking a hammering earlier in the week. It is presently trading at 1.10659, up nearly 140 pips from Tuesday’s lows. The single currency is now testing the R1 pivot, which is where lows from the 3rd week of August reside. A break above this level could open the door for 1.1082 and above that, 1.1113 (August 27 high) in the near-term.
On the flip side, failure to break the R1 pivot could lead to a retest of 1.10126 (central pivot and intraday low) and below that 1.09874 (August 29 low).
Key data to watch for are the ADP Employment Change today at 12.15pm GMT and the US Non-Farm Payrolls report tomorrow at 12.30pm GMT.Don’t miss a beat! Follow us on Telegram and Twitter.