Eurozone economy headlines the economic docket this week
The eurozone economy is heavily in focus this week, as market participants look to the European Central Bank interest rate decision and a raft of top-tier economic data releases for direction. With Brexit hogging the limelight, traders will welcome a brief change of focus, as Mario Draghi undertakes his last monetary policy meeting as President of the European Central Bank.
The European Central Bank press conference has the potential to generate significant volatility in the euro currency, given that a number of ECB members opposed the latest round of quantitative easing.
The recent release of the ECB monetary policy meeting accounts showed dissent amongst ECB voting members, which may impede the ECB from increasing monthly QE purchases in the future. Outgoing ECB President Mario Draghi is likely to face a grilling about this key issue during the ECB press conference.
Most economists agree that it is extremely unlikely that the European Central Bank will change lending or interest rates this week, although the ECB is likely to continue with its recent dovish rhetoric, ahead of Christine’s Lagarde’s appointment as President of the European Central Bank on November 1st.
Later this week investors will get a first-look at October EU PMI manufacturing data, ahead of the ECB rate decision. Initial estimates suggest that the French and German manufacturing sector remained in contraction, although the headline readings may see a slight improvement on September’s dismal readings.
Germany is also set to release important IFO survey and producer price inflation data this week, although Thursday’s PMI manufacturing readings should be far more impactful on European equity markets and the euro currency.
EUR/USD Daily Candlestick Chart | Source: ActivTrader
The EUR/USD pair has made a surprising run higher this month and is poised to break its recent multi-month losing streak. The EUR/USD pair is likely to remain well-supported while trading above the 1.1110 level, with bullish targets extending towards the 1.1230 and 1.1300 levels. Key support is found at the 1.1044 and 1.0990 levels.
Written by Nathan Batchelor, External Analyst, ActivTrades
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