Kira Iukhtenko, FBS
As we expected, euro slowed the downside on the past week, recovering towards the 1.2500 mark. Despite the current consolidation, we stay bearish and expect to see a decline towards the 1.2200 mark in the medium-term. Fix below the 1.2400 support could become a good signal to enter the short market. If the price pushes higher, we recommend selling the rallies towards 1.2650.
Data, released on the past week, show that the euro zone’s economy expanded by 0.2% in Q3 – this is slightly above the forecast of 0.1%. However, the improvement is not really significant and was partially caused by calculation changes, so the figures failed to move the market.
The overall economic picture in the currency block remains gloomy, so the European Central Bank is expected to announce a large-scale bond buying program in the coming months. We remind you that the ABS buying program begins next week.
On the new week watch ZEW economic activity indices on Tuesday and flash PMIs on Thursday. Mario Draghi will deliver a speech twice – on Monday and on Friday.