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Oct 09 - 06:55 AM

EUR/USD - Path Of Least Resistance On The Downside Leading Into ECB

By Justin Mcqueen  —  Oct 09 - 06:00 AM
  • The run up trade into the ECB meeting should be for the euro to head lower

  • Yield spreads signal room for EUR/USD to fall to 1.0850

  • Upgrade to Atlanta Fed GDPNow (3.2% vs 2.5%) emphasises U.S. exceptionalism

  • In turn, providing another layer of support for the dollar

  • Despite pushback from ECB hawks on an Oct cut. This remains the base case

  • Technically, support sits at 1.0933 (100DMA) and 1.0875 (200DMA)

  • Meanwhile, resistance is at 1.1000, 1.1035 (55DMA/Pre-NFP level)

  • Close above 1.1050 would be a worry for shorts

  • COMMENT-Fed minutes could be a bigger event than usual nL1N3LK0KG

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary

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