The Eurozone economic is facing much risk of double-dip recession with the resurgence of coronavirus infections. Tens of millions people are returning to restrictions which would hit the services industry particularly hard. Recent PMIs have already shown that recovery is faltering. Inflation has also turned into negative. ECB policymakers are clear that they’re ready for more stimulus.
Yet, Thursday is not seen as the time to deliver any new measures yet. After all, less than half the money allocated to the pandemic emergency purchase program has been spend. There won’t be need economic projections before December. By then, economists could finally factor in the results of US elections and Brexit negotiations. So December would be the better timing to gauge the stimulus needed next year. We might get some indication from President Christine Lagarde to prepare the markets for the move later.
While Euro might be firm against Dollar, the picture in EUR/CHF is not looking too well for the near term. As long as 1.0749 resistance holds (which is close to 55 day EMA), we’d expect fall from 1.0877 to extend lower. Such decline is seen as the third leg of the pattern from 1.0915 and would target 1.0602 support and even below. EUR/CHF will need to overcome 1.0749 resistance to clear near term bearishness.
