- Summary:
- On the technical side EURUSD rejected at the upper bound of the descending channel last week which paved the way for a move to lower levels.
EURUSD gives up 0.09% at 1.0908, making fresh two year lows as ECB stays on the dovish side especially after Sabine Lautenschläger, an Executive Board Member of the ECB, announced her resignation before the expiration of her tenure in October.January 2017 low at 1.0829. Dismal macro figures from EU also weigh on the common currency while US economy looks strong. Earlier the Germany Import Price Index (year over year) came in at -2.7% below forecasts of -2.6% in August.
The ECB in its last policy meeting cut the Deposit Rates by 10 bp to -0.50% and unveiled another round of debt purchases.
EURUSD Technical Analysis
On the technical side the pair rejected at the upper bound of the descending channel last week which paved the way for a move to lower levels. The bears are in control as EURUSD trades below all major moving averages. EURUSD trapped in the descending channel since June, and now the pressure from dismal macro data continues to pressure the pair to fresh two year lows. On the downside important support now stands at 1.0904 daily low and the 1.09 round figure, a break below will encourage more bears to join the action and drive the price down to 1.0838 the low from May 2017. Below this level, the next support comes in at the lows seen on April 2017 at 1.0569. This is the next target that could be attained on a convincing downside break of the 1.0838 support line.
On the upside, immediate resistance stands at 1.0925 today’s high, a break above can lead prices up to 1.0967 yesterday’s high while more supply will be met at the upper bound of the descending channel, and then at 1.1050. Short positions can sit comfortably as long as the pair trades below the psychological 1.10 mark.