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Hugo in HTO Trading,

EURUSD: Broke below the 2-year low

The EURUSD started tumbling on yesterday session following the comments that Mario Draghi President of the European Central Bank (ECB) made at a conference at the Bank of Lithuania. He said he expected the euro zone to grow modestly in the second half of the year, helped by the ECB’s recent stimulus steps and he is ready to do more to help the euro area should it become necessary.

Today on the economic calendar we have from the U.S the Gross Domestic Product Annualized that is expected to rise to 4.6% showing signs of economic recovery. The Reuters/Michigan Consumer Sentiment Index is also set to increase from 82.5 to 84.7 showing that consumers are willing to spend money.

EURUSD broke below the 2-year low but found enough support at 1.26966 to turn things around creating a hammer pattern which is a bullish sign. Stochastic in showing an oversold market so a bullish correction is due.

Expecting upward move to 1.2868 (scenario 1) or even to a key level at 1.2987 (scenario 2) on a break above previous day high at 1.2783.