Article by ForexTime
The drop in headline HICP in September has increased pressure on Draghi to expand and extend the asset purchase program, but with core inflation actually holding much higher and the headline rate expected to move back into positive territory again the ECB is maintaining a wait and see stance for now. The minutes of the September policy meeting on Thursday and comments from ECB’s Draghi on Tuesday are likely to repeat the now familiar line that it’s too early to say whether further action is needed.
With domestic developments still backing the ECB’s central view that the moderate recovery continues, external factors, first and foremost developments in emerging markets, but also central bank moves in the U.S., along with global market sentiment, will likely be decisive for Draghi’s actions going ahead. Against this backdrop Eurozone data releases this week are unlikely to change the outlook dramatically.
The EUR/USD consolidated at near support and the 10-day moving average near 1.12. Resistance is seen near a downward sloping trend line at 1.13. Momentum remains negative with the MACD printing in the red.
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