You can agree or disagree with me, but you can´t argue against charts. After the spike of optimism triggered by latest EU summit, the EUR strength has been fading slowly but steadily, as market players realize there’s a lot to do yet. Stocks edged lower today in Europe, while Spanish government yields are on the rise again. The daily chart shows latest spike of grace was not even enough to test the 1.2745 level, June high and 38.2% retracement of this year fall; even more, price has broke today below next Fibonacci support at 1.2570, and consolidates below with markets thin ahead of ECB tomorrow European morning. Could the 1.2288 yearly low be considered an interim low? It could; but there’s no technical reason to confirm so: price needs at least to close a day above mentioned 1.2745 to ease some of the strong bearish pressure its suffering since early March. Can the ECB revert the trend tomorrow? It can, at least in the short term; but a 0.25% rate cut is not significant enough and will hardly mean something once translated to real life.
Is a great level to sell right now? No doubts, NO. Spikes higher will be great selling opportunities with a stop above mentioned high, and for the bravest, above 1.2820, past May 22nd high. After upcoming news, if euro negative, a break below 1.2470 support should point for further slides towards the 1.2400 area, while once below, there are strong chances of a retest of the 1.2288 yearly low. View Live Chart for EUR/USD