As presumed the ECB decision made a hectic movement on Forex and Equities. The ECB decided to cut main refinance rate to 0.0% while markets expected 0.05% + deposit rate was cut to -0.40% vs 0.40% expected. Four new Targeted longer-term refinancing operations (TLTROs) have been announced with QE shift to €80bn Initially EURUSD has been sold to 1.0820 but when Draghi stated there will be no rate cuts Algos stepped in, equities were sold and that created a huge move up in the EURUSD towards 1.1115. Equities have a strong correlation to Forex as explained in our webinars and it can cause massive whipsaws in price action.
Technically the EURUSD is possibly showing a MASTER candle on Daily time frame and it marks clear support and resistance levels. EURUSD is looking bullish now with 1.1115 as resistance and 1.0820 as support. The daily candle serve as the best indicator of interim support and resistance where levels are clearly defined by price action in now moment. Any spike and daily close above 1.1115 will aim for 1.1215 and 1.1376 while a daily close below 1.0820 would aim for 1.0770 and 1.0700. Adding to EURUSD bullishness we see a failed bearish pennant on daily but watch for daily close above or below the master candle for next direction. My current guess it will be bullish.
The analysis and the article presents Nenad's opinion. Remember, financial trading is highly speculative & may lead to the loss of your funds. Proper risk management is the Holy Grail of trading.
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