Global macro overview for 27/10/2017

The QE program has been changed as it was generally expected: the ECB will buy assets for EUR 30 billion a month until September 2018. The program was left without an end date, and at the conference, President Draghi stressed that no one is keen on sudden QE termination. In the coming months, the ECB may withdraw from this declaration or reduce the rate by 10 billion per month and end the QE in December 2018. The dovishness was clear in a matter of reinvestment of funds from maturing bonds, which is expected to last long after the end of the program. The ECB has also relinquished an open door to re-launching the program if problems arise for the economy. In general, Draghi and the company diverted all the points of the plan, which was to ensure that the market would not build expectations for an earlier rate hike. Yesterday before the decision, the market assumed the first rally on March 2019. Now he has to push back these expectations at least for June 2019. For many holiday weeks, the market has been building positions on the Euro, and now the strategy has come under strong question. However, in the long term, the fundamental base of the Euro's defense seems solid and will provide grounds for strengthening, so that by the end of the year the Euro will remain under pressure across the board.

Let's now take a look at the EUR/JPY technical picture at the H4 time frame. The bulls did not manage to break out above the 78% Fibo at the level of 134.31 and technical resistance at the level of 134.40, so the price reversed towards the next technical support at the level of 132.01.

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