EUR/USD: Bears in control after ECB

On Thursday, EUR/USD logged its biggest single-day drop since Jan. 2.
The slide likely indicates that Draghi was more dovish than expected.
The pair risks falling below 1.13, having cleared key trendline support yesterday.

Omkar Godbole FXStreet Contributor

Dovish Draghi has likely put the EUR/USD pair on the path to a sustained break below 1.13.

On Thursday, the European Central Bank (ECB) kept key rates and forward guidance unchanged but downgraded its assessment by stating that the balance of risks has moved to the downside.

It is worth noting that expectations of ECB rate hike were pushed back to mid-2020 three weeks ago. Further, EUR/USD shed more than 200 pips in the last 2.5-weeks. Put simply, ECB's dovish turn was likely priced in.

Still, the EUR dropped post-ECB. Moreover, ECB's decision to revise downward its assessment of risks may have triggered expectations of a change in the forward guidance wording at the next meeting on 07 March.

The EUR, therefore, could soon find acceptance below 1.13. Validating that argument is the daily chart, which shows the pair closed yesterday below the support of the trendline connecting the Nov. 13 and Dec. 14 lows.

As of writing, the EUR/USD pair is trading at 1.1320.

EUR/USD Technical Levels

EUR/USD

Overview:
    Today Last Price: 1.132
    Today Daily change: 12 pips
    Today Daily change %: 0.11%
    Today Daily Open: 1.1308
Trends:
    Daily SMA20: 1.142
    Daily SMA50: 1.139
    Daily SMA100: 1.1452
    Daily SMA200: 1.1584
Levels:
    Previous Daily High: 1.1393
    Previous Daily Low: 1.1289
    Previous Weekly High: 1.1491
    Previous Weekly Low: 1.1353
    Previous Monthly High: 1.1486
    Previous Monthly Low: 1.1269
    Daily Fibonacci 38.2%: 1.1329
    Daily Fibonacci 61.8%: 1.1353
    Daily Pivot Point S1: 1.1267
    Daily Pivot Point S2: 1.1227
    Daily Pivot Point S3: 1.1164
    Daily Pivot Point R1: 1.1371
    Daily Pivot Point R2: 1.1433
    Daily Pivot Point R3: 1.1474

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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