Expectations for a 50bp rate cut by the European Central Bank later this week is likely to stoke increased selling pressure for the euro, and the U.S. dollar should continue to benefit from safe-have flows as investors remain risk adverse.
[B]Currency Pair:[/B] EUR/USD
[B]Chart:[/B] 60 Min Charts
[B]Short-Term Bias:[/B] Bearish
[B][U]Analysis
[/U][/B]
Expectations for a 50bp rate cut by the European Central Bank later this week is likely to stoke increased selling pressure for the euro, and the U.S. dollar should continue to benefit from safe-have flows as investors remain risk adverse. After reaching a low of 1.2329 in October, the EURUSD snapped back to reach a high of 1.4720 on 12/18, but the lack of momentum to sustain its gains continues to favor a bearish forecast for the pair. Over the week, we are likely to see the euro-dollar continue to work its way towards the October low however, as the relative strength index approaches over-sold territory, the pair may push back to the upside to fill-in the gap from the 120 SMA over the next few hours of trading. Nevertheless, as the economic calendar for the euro-region remains fairly light for the next 24 hours, risk trends are likely to drive price action for the pair. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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