EUR/USD analysis: trimming post-ECB gains

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1060

The greenback edged higher against most of its major rivals in dull Monday trading, leading to a EUR/USD decline down to 1.1956, its lowest since last Thursday, when ECB's Draghi failed to down talk the common currency. The rally was driven my resurgent optimism among investors, as Hurricane Irma damages Florida will be far less than initially feared, and as North Korea decided to throw a party on Saturday for the 69th anniversary of the regimen, rather than launching more missiles. Equities edged higher worldwide, while the yen, and gold were the biggest losers of the day.

The macroeconomic calendar was quite scarce, with no major releases in Europe and the US, although the week has plenty to offer, starting for this particular pair next Wednesday, with the release of German inflation, EU Industrial Production and US August inflation.

The EUR/USD pair 4 hours chart shows that the decline may extend this Tuesday, as the price has broken below its 20 SMA that lost upward strength, whilst technical indicators entered negative territory, maintaining their strong downward slopes. The decline, however, remains corrective long term, as the price would need at least to break below the 1.1800 level to be at risk of a steeper decline, something quite unlikely unless the US Federal Reserve pulls the trigger by surprise this month, which has almost null chances of happening.

Support levels: 1.2010 1.1975 1.1940

Resistance levels: 1.2070 1.2105 1.2150

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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