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EUR / USD will have a week of life and death and the extreme volatility


EURO Quote:

  • Positioning on the market announcement of monetary policy of the European Central Bank can lead to high volatility in the euro episodes.
  • Despite the fact that the euro / dollar exchange rate remains above the short-term trend line, we can not exclude medical break and a big drop when consumers throw in the towel and go out of the market.
  • In this article, we present the most important levels of support and resistance, which must be considered in the coming days.

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EUR / USD was unable to clearly define the course of its way in recent months, fluctuating up and down without any particular course. Such was the hesitancy of investors that the exchange rate is close to the pair, where it began in May – in the area of ​​1.1215.

However, this week's volatility can cause turbulence of currency positions, the awakening of the euro / dollar to sleepiness. A large segment of the market demonstrates the confidence that the European bank license introduced an incentive in their management board in July to counter the economic downturn and compete with low inflation.

Possible measure assumes a reduction of 10 or even 20 basis points to ease interest rates on deposits, which currently stands at -0.400%. Another hunch – an issue that will be considered in the establishment of Mario Draghi change the inflation targetInitiative, which would be called the central bank carries out an expansive policy more long.

Against this backdrop, the euro will start with a mild slope, as in the coming days, he may lose the position in relation to the dollar. Next, we provide Technical Analysis EUR / USD current, including the most important support and resistance levels, which need to be taken into account.

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Technical Analysis EUR / USD

In the accompanying H4 chart can be seen that EURUSD continues to be guided by the short upward trend line, which extends from the low level 2019 in May. If the price will be able to break this guide and decisively to break the 1.1205 / 1.1200 (S1), it will be attributed to a strong negative signal, the ability to attract many sellers. This scenario can be seen falling to an annual low of 1,1107 (S2).

Despite the fact that the euro prejudice to & # 39 is bearish, possible exchange rate rebound should not be ignored. If the EUR / USD breaks resistance at 1.1280 / 1.1285 (R1) and closes over the region a 5-minute sail, the next target is the sea level 1.1350 (R2).


Technical chart of EURUSDTechnical Analysis EUR / USD

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— Author Diego Colman, market analyst at DailyFX in Spanish.

Follow me on Twitter: @DColmanFX

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