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Forex pairs in this Article » EUR/USD (Edinburgh) -The EUR/USD remains glued to the 1.3515/20 region on Thursday, ahead of German data and the ECB meeting.

EUR/USD consolidating ahead of fireworks

Market consensus is now considering this meeting a close call, following the recent rumours involving a 25 bp interest rate cut, a new LTRO, negative deposit rates and else. However, the FX community does agree that the tone from today’s statement would definitely be dovish. According to Derek Halpenny, European Head of Global Markets Research at BTMU, and with the recent inflation figures taking centre stage, “For today, the key issue will be whether the ECB formally acknowledges these downside risks by altering the inflation risk assessment from “balanced” to the “downside”. Anything less than this formal change in stance would likely result in EUR/USD squeezing higher with many positioned for either a cut or an aggressive signal of a rate cut to come in December”.

EUR/USD levels to watch

The pair is now losing 0.04% at 1.3516 and a breakdown of 1.3465 (50% of 1.3105-1.3826) would target 1.3442 (low Nov.4) en route to 1.3421 (38.2% of 1.2755-1.3833). On the upside, the initial hurdle lines up at 1.3548 (high Nov.6) followed by 1.3589 (high Nov.1) and finally 1.3591 (38,2% 1.3833-1.3442).
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