The EUR/USD Trades Lower Ahead of ECB
- The EUR/USD is Breaking Trading Lower Ahead of the ECB
- Bearish Breakouts Begin at 1.0974
- SSI Reads Neutral at -1.14
(Created using Marketscope 2.0 Charts)
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The EUR/USD is trading lower for the second consecutive day this week. With price action on the decline, the pair is now attempting to breakout to new weekly lows ahead of tomorrow’s ECB rate decision. For today, bearish breakouts began under support found at the S4 pivot point at a price of 1.0974. When using a 1X price extension of today’s 36 pip trading range, initial bearish targets for the EUR/USD can be extrapolated to 1.0938. It should be noted that a move to this target would create a new weekly low for the pair, and open the EUR/USD to test longer term values of support.
In the event of a late day bullish reversal, traders should continue to monitor range resistance which is found at 1.0991. A move to this point on the chart would invalidate this morning’s bearish breakout, and signal a significant shift in today’s market conditions. Bullish targets for the day include the R3 Camarilla pivot found at 1.1027. Also, in the event of a continued advance in price, bullish breakouts for the EUR/USD begin today at 1.1045 above the displayed R4 pivot point. Targets for a bullish breakout can also be determined using a 1X extension of today’s range. This places initial breakout targets near 1.1081.
SSI (Speculative Sentiment Index) for the EUR/USD is still relatively flat going into tomorrow’s ECB rate decision. SSI is currently reading at -1.14, but this value has shifted since last week’s reading of -1.22. If the EUR/USD continues to decline, traders would look for SSI to flip to a net positive number. Conversely, in the event of a bullish reversal, traders would look for SSI to move towards a more extreme negative value.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.