September 9 2021
The ECB meets today for their September monetary policy meeting. They will be providing markets with their latest forecasts on inflation and growth. However, what the market really wants to know is when will they cut back on their Pandemic Emergency Purchase Program (PEPP).
The EURUSD Bulls will be dreaming about a more positive economic outlook, and a future cut in the PEPP. This would be EUR supportive leading to a rally in the single currency, lifting it up past 1.1860 to 1.1900.
However, will the fear of rising covid delta cases cause the ECB to take the cautious approach. It would be a EUR negative if the ECB is somewhat less than optimistic about growth ,and cutting back on stimulus.
If the ECB give us a less than positive outlook, you can expect see a continuation of this weeks EURUSD sell off to break support and trade down to the low 1.17’s
Right now the EURUSD is treading water just above 1.1800 with immediate support at 1.1790/80. Should there be a break down below 1.1780, the next area of support will be at 1.1740/30.
Resistance is will be found at 1.1850/60 and at 1.1900/10.
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