Almost all market comments today focus on the intervention of the president of the ECB yesterday and on the interpretation of the term she used: "recalibrate monetary policy instruments."
The most widespread opinion is that all possibilities are open, including a cut in deposit interest rates. However, this option is the least effective for the purposes they are trying to achieve.
Even the ECB's governing council, the Austrian Mersch, has explicitly stated that what the president pointed out is that more stimulus will come from the ECB's monetary policy. Having this this statement from a "hawkish" member of the ECB, the situation is clarified. With a high degree of probability, the central bank will intensify its stimulus policy and increase and/or extend its asset purchase policy over time.
The immediate effect of this measure will be a weaker Euro.
EUR/USD has slowed its decline today because of its oversold situation in the short term than for fundamental reasons.
The GDP figures for the third quarter of the Eurozone countries published today have been somewhat better than expected, showed significant recoveries and this has contributed to some extent to the Euro experiencing occasional rallies.
Still, these figures do not in any way offset the huge losses from previous quarters and expectations are not favorable given the return to the restricted mobility situation in almost all European countries.
Technically, the pair is leaning on the 100-day SMA at 1.1653.
The US markets
In the coming days, either due to the strength of the Dollar that will continue to act as a safe haven currency or due to the intrinsic weakness of the Euro. If this level of support breaks downward, the market will begin to focus on lower targets for the pair in the lower part of 1.1500.
In the American stock markets, the earnings of technology companies such as Apple or Facebook, although they have beaten expectations, have not succeeded in convincing investors, above all because of their forward guidance" statements, which in cases such as Facebook suggest that these results will not be so favorable in a post-epidemic future.
TECH100 remains under pressure to the downside after two weeks of continued losses and from a technical analysis perspective leaning on the 100-day SMA line at 11.094.
Below this level, it makes its way down towards the next support zone located at 10.730. Everything will largely depend on the outcome of the US elections. If volatility increases, the probability of reaching these lower levels and even lower will be high.
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