Currency Pair: EUR/USD
Chart: 60 Min Charts
Short-Term Bias: Bearish
Analysis
The European Central Bank is scheduled to meet on Thursday, and is widely expected to hold rates steady for the time being, but comments from President Trichet at the World Economic Forum suggests that the central bank may continue to ease policy further in the months ahead, which continues to favor a bearish outlook for the euro. After reaching a low of 1.2329 in October, the EURUSD snapped back to reach a high of 1.4720 on 12/18, and the pair is likely to hold its downward trend over the near-term as investors expect the ECB to lower borrowing costs further. Nevertheless, during the last few hours of trading, we saw the jump in the euro-dollar trigger an overbought RSI signal, which should lead the pair lower over the remainder of the session. However, as the pair attempts to fill in the gap from the 120 SMA, we may see the pair bounce higher over the next few hours before it continues its move to the downside. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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