The Euro gained some ground yesterday after reports that US-China made no progress in deputy-level talks, which increased the probability of a Fed rate cut at the next FOMC meeting. Today, the focus will be on the ECB minutes, after the central bank lowered its deposit rate by 10 basis points to -0.50% in September and announced a fresh bond-buying program, scheduled to begin from November. The fresh stimulus announcement, however, was controversial. Governing Council member Robert Holzmann recently criticized the zero interest rate policy in Europe, by stating that it leads to less growth and lower productivity. Therefore, the Single currency could come under pressure today if the minutes show growing consensus regarding the need for more stimulus.
The Single currency bulls are attempting to retest the 1.10 key resistance level, just below the 200-day moving average. The sellers should be able to hold that level and push the Euro lower, if they want to stay in control of the overall bearish channel. However, a clean break above the 200-day moving average could change the medium-term outlook to the bulls’ side.
Support: 1.0965 / 1.0941
Resistance: 1.10 / 1.1025