Forecast for EUR/USD on December 10, 2020

EUR/USD

Today is the start of the EU summit, which is maybe the most dramatic event in the past six months. Now, here is a list of issues that are unlikely to find a solution:

  • Brexit, particularly the approval of a trade agreement that does not exist (Johnson's negotiations with Leyen only ended with the fact that they were postponed until Sunday)
  • EU budget associated with economic stimulation, raising the issue of limiting carbon dioxide emissions
  • Poland and Hungary's veto decision about the 1.8 trillion euro recovery fund
  • Conflict between Greece and Turkey over the latter's violations on oil restrictions and gas exploration in the disputed waters of the Mediterranean Sea

ECB's decision on monetary policy will also be announced today. The officials of the Central Bank say that a decision will be made to increase the QE PEPP program from 1.35 trillion euros up to 2.0 trillion, and the extension of the TLTRO program. At the press conference, Christine Lagarde will likely leave an allowable range in understanding the relation to the base rate, which may be lowered in the near future.

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The euro's attempt to consolidate above the level of 1.2117 ended unsuccessfully yesterday, which happened for three consecutive days. Thus, it lost 21 points.

The daily chart shows that the price is directed towards the support of the nested price channel line (1.2037). After breaking through which, it can further decline to the support of the MACD line in the area of 1.1934. Meanwhile, the Marlin oscillator is headed downwards.

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The price on the four-hour chart has already settled below both indicator lines, while the Marlin oscillator is developing a downward mood in the negative area. It is likely to overcome the nearest support and further decline to the second target of 1.1934.

The material has been provided by InstaForex Company - www.instaforex.com