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EUR/USD Reverses Uptrend Below 1.40 as ECB Remains Dovish

Mario Draghi: President of the ECB 

Dovish ECB, Reversal in EUR/USD:

The ECB held the key interest rate at 0.25%, and the statement did not mention any increased intention to add stimulus measures. 

The EUR/USD was bullish all week, first breaking above the 1.3905 resistance. Then after a brief consolidation just above 1.3905, traders pushed EUR/USD higher even ahead of the ECB event risk.

EUR/USD came up to 1.3993 before retreating. Draghi noted that the bank is still ready to act under the current conditions. The press conference didn't provide anything surprising - any central bank should always be ready to act. Still, the bank remains dovish and traders may have been looking for an excuse to sell near 1.40 as the EUR/USD was also overbought in the near-term based on oscillators.

(eurusd 1h chart, 5/8) 

Looking at the 1H chart, we see price now back at 1.39. There is a rising trendline support an pivot in this 1.3885-1.39 area. A break lower opens up a bearish outlook toward the 1.3765-1.3785 support area. 

As I wrap up this post, it looks like the market is pushing lower.

Okay Yellen is next up. Let's see how the market reacts then. Failure to return above 1.3950 after Yellen should help confirm a short-term reversal scenario, and the 1.3764-1.3785 level would be in sight.