The EUR/USD is again under strong selling pressure, having been falling since early European morning and ahead local inflation data. EZ CPI monthly basis came out as expected at 0.3%, the yearly reading down to 0.7%, against the expected 0.9%, putting inflation in the area at a 5 years low. Italian CPI added to the negative sentiment, as the number resulted negative, -0.2%, all of which suggest deflation is a real risk.
Selloff triggered stops in the EUR/USD, with market players now pricing in more action coming from the ECB on Thursday. But will this be enough to force Mario Draghi into full QE mode, or will the ECB head bring a wait and see stance? One way or the other, bears are in control, and despite the pair is due to an upward correction, there’s a long way up before a reversal can be called.
Technically, the 4 hours chart maintains the bearish tone, with price capped below a bearish 20 SMA now around 1.2680 daily high, with indicators heading strongly south in negative territory and RSI entering oversold territory. Some consolidation around current levels can be expected, before next move, with a downward acceleration through 1.2590 exposing the 1.2550 price zone in the short term. Immediate resistance stands at former lows around 1.2660, and pullbacks back to the level may be seen as selling opportunities; only above mentioned 1.2680 the bearish pressure may ease on the day, with a probable recovery then extending up to 1.2720/40 price zone.
View Live Chart for EUR/USD
Selloff triggered stops in the EUR/USD, with market players now pricing in more action coming from the ECB on Thursday. But will this be enough to force Mario Draghi into full QE mode, or will the ECB head bring a wait and see stance? One way or the other, bears are in control, and despite the pair is due to an upward correction, there’s a long way up before a reversal can be called.
Technically, the 4 hours chart maintains the bearish tone, with price capped below a bearish 20 SMA now around 1.2680 daily high, with indicators heading strongly south in negative territory and RSI entering oversold territory. Some consolidation around current levels can be expected, before next move, with a downward acceleration through 1.2590 exposing the 1.2550 price zone in the short term. Immediate resistance stands at former lows around 1.2660, and pullbacks back to the level may be seen as selling opportunities; only above mentioned 1.2680 the bearish pressure may ease on the day, with a probable recovery then extending up to 1.2720/40 price zone.
View Live Chart for EUR/USD
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