The European Central Bank published the minutes of its last meeting yesterday, which contained rather negative outlook for the eurozone economy. The current despondent state of the bloc could lead to the further expansion of the ECB's bond purchase program and additional stimulus. However, such an approach is likely to weaken the position of the euro against other world currencies.

At the moment, the euro is struggling to move in a clear direction, mainly due to a number of reasons. One is the dispute over the US presidential elections, while another is the expectations that a massive stimulus program will be adopted in the US as soon as Joe Biden takes office, both of which support the euro. The other one, which drags demand for the European currency down, is the possible extension of quarantine measures, since COVID-19 incidence continues to increase in many European states.

Yesterday, German Chancellor Angela Merkel urged the citizens to fight more actively against the virus. According to her, if more and more citizens fall under the grasp of the virus, the country may face an overloading in the healthcare system. Merkel also said the partial lockdown in Germany will be extended until at least December 20, while other restrictions will remain until early January 2021. If the situation fails to stabilize, the restrictions may be extended until March next year.

On the topic of economic outlook for the euro area, the European Central Bank published the minutes of its last meeting yesterday, which contained rather negative prospects for the EU economy. Nonetheless, the central bank announced a wait-and-see attitude, in which the decision to change the monetary policy will be made on the basis of fresh data on the epidemiological situation in the eurozone, as well as on the basis of reports showing how much economic growth is slowing down and how quickly the unemployment rate is rising in the area. As for inflation expectations, they, on the contrary, decreased, which put downward pressure on risky assets. Inflation is expected to remain negative for the rest of this year, which will only increase the risk of deflation.

Other macroeconomic reports were also published yesterday, one of which is data on France's consumer confidence. The latest statistics indicate the index fell to a 2-year low, dropping to 90 points against 94 points in October. Such deterioration is associated with the situation on the labor market, in which the country's unemployment rate is expected to jump 1.9% in the third quarter. The rest of economic reports, which will more fully clarify the state of France's economy, will be released today.

With regards to the EUR/USD pair, the bulls are still looking towards the sharp strengthening of the European currency, but for this, the quotes need to get above the level of 1.1930. It is only by this that the euro will be able to move towards the 20th figure, and a breakout from 1.2008 will lead in a further move to 1.2060 and 1.2110. But if the quote returns to 1.1880, the euro will collapse to 1.1840 and then head to the 18th figure.