Technical Bias: Bearish
Key Takeaways:
- EURUSD steady ahead of ECB monetary policy
- 1.0469 remains key support area
- Bulls wait for solid bullish signal
The Euro (EUR) extended upside movement against the US Dollar (USD) yesterday, increasing the price of EURUSD to more than even 0.07000 ahead of the European Central Bank (ECB) interest rate decision which is due today. The technical bias remains bearish due to a Lower High on the daily chart.
Technical Analysis
As of this writing, the pair is being traded near 1.0627. A support can be seen around 1.0531, the intraday low of yesterday ahead of 1.0469, the low of the last major dip as demonstrated in the following daily chart. A break below the 1.0469 support area could incite renewed selling pressure, confirming the bearish bias for Euro/Dollar pair.
On the upside, the pair is expected to face a hurdle near 0.0706, the intraday high of yesterday ahead of 1.1035, the high of the last major upside rally. The technical bias will remain bearish as long as the 0.0706 resistance area is intact.
ECB Monetary Policy
The ECB is due to announce its monetary policy today. According to the average forecast of different analysts, the central bank is likely to keep the benchmark interest rate steady at 0.05% amid low inflation and fragile growth rate. The Central Bank has already kicked off unprecedented Quantitative Easing program earlier this year, any increase in the bond purchases will increase selling pressure in EUR/USD and other Euro crosses.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair can be a good strategy if we get a bullish pin bar or bullish engulfing candle around the current levels.
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