There are two VERY important, key meetings this month. FED and ECB. ECB meeting is scheduled for this Thursday and we need to be very careful. There is a possibility for a rate cut by 10/20 bp although the expectations are that there will be no cut, but we need to be prepared for everything. The inflation is low, Euro zone recovery is stagnant, EM (Emerging Markets) are slowing down and ECB could take action. Adding to that I also expect further QE.
Technically the EURUSD is contained within the equidistant channel and we might see some weaker price action until Thursday. That being said the pair is still in “Sell the Rallies” mode. The first POC (DPP,38.2,E89) is in 1.0610-20 zone while the 2nd POC is just a bit higher in 1.0640-50 zone ( double top, EQ channel high, 61.8). If the pair manages to stay below 1.0690 we could see a further drop towards 1.0520.
EURUSD is moving slowly which is normal considering an upcoming ECB meeting and I dont expect anything big before Thursday.
The analysis is supplied by Nick from Forex Trading Bonus