The economic calendar is full today with data from the US and the Monetary Policy Report from the BoC but traders will be squarely focused on news coming from the EU economic summit.
Expectations are for an agreement to be hammered home today regarding new capital injections into the European banking system but up until now the parties (in particular Germany) have been unable to agree to the respective haircut on Greek debt and just how the EFSF will be leveraged. One thing is for certain that Germany is dead fast against continued ECB involvement in EFSF. These decisions will likely be delayed until the next G-20 meeting on November 3-4 or the Ecofin meeting on the 7th. Today’s announcement coming from the EU economic summit is expected around 17:00 GMT.
Currently the EUR remains in a tight trading range though a positive press release from today’s meeting could change all that. The big round number of 1.4000 is only a stone’s throw away and the 50% Fibonacci retracement from the May high to the October low coming in at 1.4040. Should the market be disappointed by today’s events the downside may offer 1.3820 as initial support followed by 1.3650 where the 20-day moving average lies.
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