ECB plays safe, euro suffers.
“ECB to raise rates substantially rather than drastically.”
European Central Bank’s (ECB) latest policy meeting was rather disappointing, with EUR/USD plummeting more than 100 pips after the fact. In the announcement, ECB decided to raise interest rates in July, but to do so with only 25 basis points increment. The decision was perceived as dovish when compared to pre-meeting comments that signalled for a more drastic move. During the press conference, ECB President Christine Lagarde stated that the decision was met “unanimously” and emphasized that economic conditions in EU warrants for an era of tightening ahead.
Quick recap on EURUSD
The pair remains traded within a descending channel, as bears keeps their guards high on the upside.
EURUSD Weekly Technical Analysis
From weekly perspective, bears continue to steer the pair downwards, evident in recent pullback near the top level of descending channel.
EURUSD Daily Technical Analysis
In daily perspective, the pair tumbled down to 1.0623, a level to be watchful for further confirmation. Nonetheless, it is worth mentioning that MACD shows significant shift in momentum towards the downside.
ORDER TYPE: SELL STOP
STOP LOSS: 1.0690
Target 1: 1.0490
Target 2: 1.0400
ZFX Analyst’s Comment
Although EUR/USD has recently closed below 200-MA line, the recent support of 1.0623 would be a challenge for bears to take over. Thus, a close below the support level would provide a pickup in bearish momentum for further weakness in the near-term.
Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.
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