FX.co ★ All attention to the decisions of central banks

The trade is on the side of the euro, which is quite expected, ahead of the key two-day meeting of the Fed. The decision on the refinancing rate will be announced this Wednesday while the ECB's decision is expected on Thursday.

The ECB will leave interest rates unchanged on Thursday but there will be no doubt that the focus will be on the ECB President's statements on inflation. This is where the prospects for changes in monetary policy are tied.

If traders feel that the ECB will again resume the rate of inflation at 2.0% by 2020, this could lead to a new wave of growth in the euro, which has recently declined significantly against the US dollar. It is important to note that the ECB has set the target inflation rate just below 2%.

If the ECB makes statements with a hint of an excessively expensive euro which slows economic growth and significantly harms exports, many investors may close a number of long positions in the euro by the end of the year. This will lead to strong pressure on risky assets.

As for the current technical picture, the further growth will directly depend on the resistance level of 1.1810 and on whether the buyers will be able to overcome it today. Considering what a fundamental background awaits us in the middle of this week, one can hardly count on large euro purchases without new data.

Earlier this morning, the British pound tried to update the lows of last week. Itt traded before the EU decision to declare a breakthrough in negotiations on Brexit.

All emphasis is on the permission to move in the negotiations on EU trade with the UK. While it is not completely clear what progress was made in the negotiations, there are no specifics actions which will result in such a market reaction. The pressure on the pound is from the fact that this weekend, there were reports that a number of countries outside the EU expressed dissatisfaction with the prospect of obtaining a UK status.

It is important to remember that on Thursday, the Bank of England's decision on interest rates will be announced. It is unlikely that BA will go to another rate hike but the comments of the Central Bank can positively affect the rate of the British pound against the US dollar.

Another important point, which should be noted, is the decision of the Swiss National Bank on interest rates. Many leading experts say that the SNB will reconsider its inflation forecast. There may also be statements of readiness to resort to intervention in order to weaken the Swiss franc. This can lead to very large volatility in the market which will ruin the franc rate.