EUR/USD: Bears Back in Charge Below 1.1000, ECB in Focus
The EUR/USD’s recovery beyond 1.10 handle once again fizzled in early trades, and the prices reverted in the negative territory below the last.
EUR/USD languishes near lows
Currently, EUR/USD drops -0.20% to 1.0976, heading for a retest of session lows reached at 1.0970 post-China open. The main currency pair remains under pressure so far this session as markets clear out their EUR positions ahead of the much awaited ECB policy decision.
Markets are almost convinced that the ECB will act this time and a 10bps depo rate cut by the central bank is already priced-in to the markets. Moreover, markets also anticipate extension of the QE program beyond March 2017, given the recent series of weak manufacturing, services as well as inflation numbers. However, ECB Chief Draghi’s comments at the presser are expected to grab a lot of attention.
In the meantime, the second-tier data in the German trade balance will be reported, which is expected to virtually have no impact on the EUR, as the main market driver is expected to remain the ECB event.
EUR/USD Technical Levels
In terms of technicals, the pair finds the immediate resistance at 1.1000 (psychological levels). A break beyond the last, doors will open for a test of 1.1034/42 (daily R1/ 200-DMA). On the flip side, the immediate support is placed at 1.0941/39 (daily S1/ 1h 200-SMA) below which at 1.0911 (100-DMA) could be tested.
(Market News Provided by FXstreet)
