ECB Press Conference
We will focus on ECB Monetary Policy Decision. No rate change is expected from the ECB, however, Governor Draghi’s statements about the fate of quantitative easing in Eurozone will be quite important for EUR/USD. We might hear what the ECB plans to do with their stimulus program beyond the current December expiration The consensus forecast is that it will halve its asset-purchase program to €30 billion per month from €60 billion and extend it by nine months from January. If the ECB give us surprising details about their stimulus program, the market may show significant price action behind the single currency.
The press conference is about an hour long and has 2 parts – first, a prepared statement is read, then the conference is open to press questions. The questions often lead to unscripted answers that create heavy market volatility.
Turkey's Interest Rate Decision will be released today. In Turkey, the CBRT will hold its monetary policy council meeting, There is no market consensus regarding rate hike however the Bank should continue to have the tight monetary policy until the upside risks are over on inflation view. Late liquidity window rate is currently at 12.25%. There is no rate change expectation in neither marginal lending rate at 9.25% nor one-week repo rate at 8.0%. Any surprising revision would lead to a volatility in USD/TRY.
US Initial jobless claims will come out and it is expected to be 230 K, which points to a little rise from previous week’s 222 K.
U.S Pending home sales will be also announced. It is expected to increase to 0.2% m/m in September from 2.6% drop in August. Increase in pending home sales is good news for US housing market. A higher than expected reading should be taken as positive for the US Dollar.
Technical Analysis
The EUR/USD pair showed a bullish action and the price is trading above the main level of 1.1812. As long as the price remains above 1.1812, on a daily basis, the bullish action may gain more momentum, we will face resistance level at 1.1884. On the other hand, if the pair drops below 1.1812, the next support level will be at 1.1768.
- Support: 1.1812 - 1.1768 – 1.1720
- Resistance: 1.1884 – 1.1968 – 1.2052
The Gold price showed an upward movement yesterday. In the event that the bullish action continues, we will face the 1283 key resistance level. Moreover, In order for the bullish action to gain more momentum. it needs to rise and stay above 1283. In this case, the next resistance level will be at 1291. On the other hand, if the price pullbacks, we will face 1276 as a daily support level.
- Support: : 1276 – 1272 – 1265
- Resistance: 1283 – 1291 - 1307
The GBP/USD pair moved up and the price is trading above the 1.3242 major level. As long as the price trades above 1.3242, on a daily basis, the Sterling may gain more value against the greenback and we will face 1.3305 and 1.3370. On the other hand, if the price drops below 1.3242, the next support level will be at 1.3199.
- Support: 1.3242 - 1.3199 - 1.3152
- Resistance: 1.3305 – 1.3370 – 1.3433