Currency traders are looking towards ECB policy meeting on Thursday. EUR/USD is struck in a range. When it comes to the single currency, Rosenstreich thinks we could see some short-term wobbles, but supposing the ECB decides not to act on Thursday, the euro-dollar exchange rate will still be stuck in a trading range of $1.34 – $1.31. Rosenstreich sees this continuing until we get deflation or the chorus of central bankers becomes unified.
Daryl Guppy is of the firm opinion that the EUR/USD downtrend is strong. This is what he says: Growing expectations for ECB easing saw the euro/dollar decline decisively below $1.34 in August, marking a significant downtrend confirmation. The $1.34 level has acted as a long-term support and resistance, defining price activity starting in December 2011. The pair has remained in a broad trading band since September 2012; $1.34 is in the middle of this band.
Several economists now see a larger chance of the ECB embarking on QE in the coming months.