EUR/USD: the ECB meeting as not done the euro bulls any favours at all [Video]

ANALYSIS | 01/24/2020 11:08:27 GMT

EUR/USD

The ECB meeting as not done the euro bulls any favours at all. A decisive negative candle on EUR/USD has continued the corrective move of the past few weeks and driven an outlook changing move below $1.1065. We have been watching this support of the first key reaction low of the October to December rally, knowing that it was crucial to holding on to a positive outlook. However, having been breached the old medium term uptrend bias has been confirmed as broken. A new downtrend phase is in place. Lower highs and lower lows, with a downtrend channel forming over the past few weeks. Momentum indicators confirm the breakdown, with RSI below 40 (a key move), MACD lines below neutral and Stochastics negatively configured. This may still just be part of a bigger trading range $1.0980/$1.1240, but in the least there is a negative bias formation now. Subsequently, we favour selling into strength as a strategy. There is immediate overhead supply at $1.1065/$1.1100 which is now a sell zone. It would need a breach of $1.1120 resistance and the downtrend channel (at $1.1140 today) to now change to a positive outlook. A move back towards $1.0980/$1.1000 support area now looks likely.

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