EUR/USD Tests Long Term Support Before ECB Monetary Policy

FXOpen

EUR/USD held a tight range throughout the previous week and the same trend is expected to continue this week ahead of the European Central Bank (ECB) monetary policy announcement. The pair might test the long term channel support before the ECB interest rate decision.

Technical Analysis

As of this writing, the pair is being traded near 1.3834. A hurdle can be seen around 1.3853, the 61.8% fib level, ahead of 1.3896, the 76.4% fib level and then 1.3966 that is the swing high of the previous wave as demonstrated in the following chart.

euro usd

On the downside, the pair is expected to find a support around 1.3784, the 38.2% fib level, ahead of the channel support which is currently sitting in near 1.3780. A break and daily closing below the channel support will push the pair into correction phase, opening doors for the fresh lows below the 1.3600 handle. The current market sentiment is slightly bearish due to Lower High (LH) in the most recent upward rally; a Lower Low (LL) will confirm the bearish sentiment.

Germany Imports

Germany Import Price report is scheduled for release on Monday. According to the median projection of different economists, the import prices declined by 0.2% in March as compared to 0.1% decline in the month before, worse than expected actual outcome will be seen as bearish for the EUR/USD and vice versa.

Trade Ideas

There might be two good trade strategies for EUR/USD this week. First, consider selling on rallies around the 0.3900 handle, keeping the stop loss near 1.3950. Secondly, consider selling on a daily close below the trendline support. A breakout through the long term channel support will open doors for steep losses towards the old levels around 1.3500 or even below.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

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.

Stay ahead of the market!

Subscribe now to our mailing list and receive the latest market news and insights delivered directly to your inbox.

Latest articles

   Weekly Market Wrap With Gary Thomson: GBP/USD, EUR/USD, USD/JPY, XAU/USD, NVDA Stock
Financial Market News

Weekly Market Wrap With Gary Thomson: GBP/USD, EUR/USD, USD/JPY, XAU/USD, NVDA Stock

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of FXOpen UK, as he breaks down the most significant news reports and shares his expert insights.

  • GBP/USD Hits Four-Month
Analysis of USD/JPY: Was There an Intervention?
Forex Analysis

Analysis of USD/JPY: Was There an Intervention?

Yesterday’s news of slowing inflation in the US sharply weakened the dollar, anticipating the Federal Reserve’s monetary easing. In the first 15 minutes after the data release:

→ EUR/USD rose by approximately 0.45% to the psychological level

What Is a Parabolic Arc Pattern, and How Can You Trade It?
Trader’s Tools

What Is a Parabolic Arc Pattern, and How Can You Trade It?

The parabolic arc pattern is a significant formation in technical analysis, showcasing rapid, exponential price movements that signal significant bullish momentum followed by sharp reversals. This article delves into identifying, trading, and managing the risks associated with parabolic arcs.

Understanding

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.