The Euro (EUR) rallied against the US Dollar (USD) yesterday, increasing the price of EURUSD to more than 1.0900, the biggest one-day increase in more than six years amid unexpected announcements by the ECB. It was termed as a Christmas Gift by some market commentators. The technical bias however still remains negative because of a Lower Low in the recent downside wave.
As of this writing, the pair is being traded around 1.0941. A hurdle may be noted near 1.0980, the intraday high of yesterday ahead of 1.1000, the psychological number and the 1.1076, the 50% fib level as demonstrated in the following daily chart.
On the downside, the pair is likely to find a support near 1.0800, a major horizontal support as well as psychological number ahead of 1.0517, another major horizontal support on the daily chart. The technical bias will however remain negative as long as the 1.1490 resistance area is intact in the long run.
The European Central Bank (ECB) has moved to bolster the eurozone economic recovery by cutting a key interest rate and extending its stimulus programme. The overnight deposit rate was cut from -0.2% to -0.3%, to push banks to lend instead of parking money at the ECB. The ECB also extended its monthly €60bn stimulus programme by six months to March 2017, but left its main interest rate on hold at a record low of 0.05%. Many analysts were underwhelmed by the news and had forecast tougher measures.
If the today’s Nonfarm Payrolls come better than expectations then it will give a great buying opportunity in EURUSD around 1.0800.