FXOpen
The Euro (EUR) nosedived against the US Dollar (USD) yesterday and extended downside movement on Friday, dragging the price of EURUSD to less than 1.0650 following the European Central Bank (ECB) announcement to extend its Quantitative Easing (QE) program. The technical bias remains bearish because of a lower low and lower high in the recent wave.
Technical Analysis
As of this writing, the pair is being traded near 1.0618. A support can be seen around 1.0600, the psychological number ahead of 1.0505, the swing low of the last major downside move and then 1.0000, the parity level.
On the upside, the pair is expected to face a hurdle near 1.0660, the short term horizontal resistance area ahead of 1.0729, a major horizontal resistance zone and then 1.0873, the intraday high of today. The technical bias will remain bearish as long as the 1.1300 resistance area is intact.
ECB Expands QE
The European Central Bank has extended its bond buying programme until the end of 2017, as Mario Draghi insisted there was “no question” of ECB tapering even as monthly purchases were cut by a quarter. The ECB president revealed a split among policymakers over the central bank’s decision to extend quantitative easing but reduce monthly purchases to €60bn next April from €80bn. Markets and analysts had expected purchases to continue at €80bn until next September. Mr Draghi said buying bonds with yields below this level remained an “option” rather than a “necessity”.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair on short term rallies appears to be a good strategy.
Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about trading forex with FXOpen.
* FXOpen International, Innovative Broker of 2022, according to the IAFT
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Latest from Forex Analysis
Latest articles
Market Analysis: American Currency Rises Sharply after Fed Meeting
As expected, the decision on the interest rate had a powerful impact on the markets. Thus, the euro/US dollar pair lost more than 100 pp in just a couple of hours and updated its recent low at 1.0630,
Oil Analysis: Finally, A Bearish Reversal?
The policy of OPEC+ countries to voluntarily reduce oil production was one of the drivers thanks to which the price of WTI oil increased by approximately 40% from its low in June. In such cases, it is appropriate to use
Central Bank Week Shakes Up Gold Market
Yesterday, the main event of the week took place — the Federal Reserve meeting, which had a noticeable impact on the market of assets denominated in US dollars. But besides the Fed meeting, there are a number of other events this