ECB Preview: Extent of potential EUR rebound on another hike could be limited – OCBC

Key focus on ECB meeting today. Economists at OCBC Bank discuss how the EUR could react to the Monetary Policy Decision.

Expect volatility around ECB decision

We expect a 25 bps hike as core inflation remains sticky. But as growth concerns in the EU stand out, we would be cautious about the extent of potential EUR rebound.

We would also pay close attention to ECB communication and its quarterly economic forecasts, where growth is expected to be lowered but inflation may be revised higher for 2024.

Resistance at 1.0780, 1.0830 levels (200-DMA, 23.6% fibo retracement of Jul high to Sep low) and 1.0900 (100-DMA). 

Key support at 1.0700/1.0720 levels before 1.0635/1.0650 levels.