EUR/USD Dives, CAC 40 Rallies Ahead of ECB
- EUR/USD Dives, CAC 40 Rallies Ahead of ECB
- EUR European Central Bank Rate Decision (JUN 08) expected at 0.00%
- What’s next for the Euro and equities markets? Learn more with our market forecasts
The EUR/USD is under pressure while European equities markets such as the CAC 40 are trading higher for Wednesday. This shift in markets has come ahead of tomorrow’s highly anticipated ECB rate decision. Expectations for the event are set to see rates at an effective 0.00%. However, a recent leak to Bloomberg News shows that the ECB could reduce inflation forecasts through 2018.
So far for Wednesday’s trading, the EUR/USD has declined as much as 75 pips off of the daily high at 1.1203. Technically this decline has placed the EUR/USD back at its 10 day EMA (exponential moving average). This line is found at 1.1232 and is currently acting as a point of support for the pair. In the event that the EUR/USD closes below 1.1232, it may suggest a technical change in the short term trend. If prices rebound above this line, however, traders may again look for prices to challenge the standing 2017 high at 1.1285.
EUR/USD, Daily Chart with 10 day EMA
Technically, the CAC 40 is now ranging for the 15th consecutive session. Support for this daily range remains at the May 18th low at 5,238.40. Prices this morning have bounced off of this value, and if the CAC 40 continues to rise traders will look for resistance near the May 25th high of 5,375.50. Traders should note that these values may come into questions during tomorrow’s ECB rate decision. If the Index closes either above 5,375.50 or below 5,238.40, it may suggest a shift in market conditions. In this scenario, traders may elect to conclude any range-based positioning or trade in the markets newly chosen direction.
CAC 40, Daily Chart with Range
--- Written by Walker, Analyst for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.