The EUR/USD pair witnessed another failed attempt to take out 200-DMA at 1.1048 on Tuesday. The spot rose to a high of 1.1058 only to surrender gains and end the day on a weak note at 1.1009 levels. The risk-off in the equities helped the EUR rally.
EUR unlikely to find support on weak stocks
A day ahead of the ECB meeting, the bulls are likely to stay on the sidelines. Hence, the common currency may struggle to rise even if the equity market risk aversion continues/worsens today. However, the European stocks may rise in anticipation of big ECB bazooka, sending EUR lower across the board. The data calendar across US and Eurozone is light. Hence, bears could have a free run today.
Technicals – Eyes 50% Fibo support
Euro’s failure to take out 200-DMA on Tuesday coupled with Doji formation at the rising trend line resistance and a daily closing below trend line could be warning sign for the bulls who see ECB under deliver tomorrow.
The bearish formations mentioned above have opened doors for a break below 1.0947 (50% Fibo of 1.0517-1.1376) and slide to 1.0845 (61.8% fibo of 1.0517-1.1376).
However, a re-test of 200-DMA cannot be ruled out if the spot rebounds from 1.0947.
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