Maybank notes that the attention of the Forex turns this week to the ECB, which could impact on EUR/USD.
«The attention this week turns to the ECB on Thursday. The markets are expecting an announcement of a reduction in QE.
The expectations are split between a reduction in the purchase of 30mds and 40mds for a period between 6 and 9 months, from January 2018.
Our base scenario is for a reduction of 40mds for 6 months before a reduction of 20mds with them for 6 months. This option would see the ECB maintain a certain degree of accommodation of money (about 360mds for 2018 against 780mds in 2017) for the dynamics of inflation will be more sustainable, and sustained.
A delay of the announcement would be seen as dovish and is expected to weigh on EUR, while a reduction of less than 20mds would be a surprise hawkish and might support EUR.
However, we note that trading EUR based on expectations of normalization of monetary may be insufficient, in view of the uncertainties and political risks in the euro zone.
The momentum daily EUR/USD remains neutral, whereas the indicators on a weekly basis are skewed to the downside.
EUR/USD may evolve between the support of 1.1670 and the resistance of 1.1850 before the ECB meeting. «