EURUSD Corrective Recovery Risk Expected

[FXTechstrategyTeam]

EURUSD: Having rejected lower prices to close flat on Monday, EURUSD corrective recovery risk is now expected. This is coming on the back of the pair’s past week losses. We expect a recovery higher to build up in the days ahead. On the downside, support lies at the 1.0600 level where a violation will aim at the 1.0550 level. A break of here will aim at the 1.0500 level with a turn below that level targeting the 1.0450 level. Conversely, resistance comes at 1.0700 level with a cut through here opening the door for more upside towards the 1.0750 level. Further up, resistance lies at the 1.0800 level where a break will expose the 1.0850 level. All in all, EURUSD corrective recovery risk remains while it trades above the 1.0598/19 zone

[thenews]

German Q3 GDP final qq SA +0.3% vs +0.3% exp Final German GDP data now out

• +0.3% prev
• yy WDA + 1.7% vs +1.7% exp/prev
• yy NSA + 1.8 % vs +1.8% exp/prev
• pvt consumption qq + 0.6 % vs +0.5% exp vs +0.1% prev revised downfrom +0.2%
• govt spending qq +1.3% vs +0.4% exp vs +0.7% prevrevised upfrom +0.3%
• cap investment qq -0.3% vs 0.0% exp vs -0.4% prev
• construction investment qq -0.3% vs +0.1% expvs -1.3% prev revised downfrom -1.2%
• domestic demand qq +0.7% as exp vs -0.2% prev revised upfrom -0.3%
• exports qq +0.2% vs +0.4% exp vs +1.8% prev revised downfrom +2.2%
• imports qq +1.1% vs +1.0% exp vs +0.5% revised down from +0.8%

Not a lot to glean from the headlines but increases in pvt consumption and govt spending in Q3 noted along with softer exports reading

EURUSD unchanged at 1.0623 EURGBP a tad lower at 0.7016 as cable catches a small bid, EURJPY 130.29

[thenews]

EUR/USD: Is There A Scope For Re-Building Shorts Into ECB? - BNPP Comments from ECB’s Lautenschlaeger on Monday highlighted that not everyone on the Governing Council is on board for further easing.

However, BNP Paribas thinks ECB President Draghi and the majority will remain focused on the subdued inflation outlook and deliver a cut in the deposit rate, an extension of the asset purchase programme and an increase in the monthly rate of asset purchases at the 3 December meeting.

"We see further scope for a rebuilding of EUR shorts (currently at just -6 on a scale of +/- 50 according to our positioning indicator) and weakness in the EUR going into the ECB meeting, with EURUSD likely re-testing 1.05.

However, ECB action in line with our expectations would more likely lead to a ‘buy the fact’ reaction, pushing EURUSD higher into year-end," BNPP projects.

[thenews]

ECB's Smets is confident in latest ECB measures Out the woodwork they come

• Is confident that that measures will increase the probability of return to price stability (not the biggest vote of confidence)
• He invites markets to look at the results and see reinforcement of policy by latest measures
• ECB sees signs of improvement, certainly in terms of economic growth
• ECB sees signs of revival of inflation but more slowly than previously thought up

Jan Smets is head of the Belgian central bank and his comments come after they release their latest forecasts. Their forecasts are as follows;

• 2015 1.4% vs 1.2% prior
• 2016 1.3% vs 1.5% prior
• 2017 1.7%