EURUSD Steady After ECB Decision – But Outlook Remains Bearish
The EURUSD price is little changed today as traders reflect on the accommodative interest rate decision by the European Central Bank (ECB) and the strong US economic data. The pair is also waiting for a slew of major economic numbers from the European Union and the United States. It is trading at 1.1680, which is a few pips below the overnight high of 1.1695.
The ECB concluded its monetary policy meeting yesterday and as expected, it left its Covid-19 response tools unchanged. It is still conducting its quantitative easing policies with a ceiling of 1.35 trillion euros. Also, it left its main interest rate unchanged, as most analysts were expecting. Notably, the members committed to intervene, possibly in the December meeting, if the economy continues to weaken.
The meeting came at a difficult time for the European economy. After months of growth, the region has started to implement new lockdowns to halt the spread of the virus. This is after most economies like Germany, France, and Italy started seeing an uptick in new infections. Also, according to researchers, a new strain of the virus has started to spread in Europe.
Later today, the EURUSD will react to the first estimate of Eurozone third quarter GDP data. It will also react to other numbers from the region, including the German GDP and import price data and the preliminary inflation numbers.
Meanwhile, the EUR to USD reacted to the impressive economic data from the United States. According to the country’s statistics office, the economy expanded by a record 33% in the third quarter. That was a better performance than what most analysts were expecting. Another data showed that the number of people who filed for unemployment benefits dropped to the lowest level since March. Later today, the pair will react to the consumer spending and income data.
EURUSD technical outlook
On the hourly chart, we see that the EURUSD pair has risen from the yesterday’s low of 1.1649 to a high of 1.1695. The price is still below the 15-day and 25-day exponential moving averages. The pair has also formed a bearish flag pattern and is slightly below the important resistance of 1.1688.
Therefore, I suspect that the price will resume the downward trend, with the first support being the yesterday’s low of 1.1649 followed by 1.1600. On the other hand, a move above the resistance of 1.1688 will open doors for the pair to move above 1.1700.