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EUR / USD is under pressure awaiting ECB meeting

Sep 9 2019, 03:47 PM (BDT) |

After a small correction, in the first half of the last trading week, the EUR / USD currency pair resumed its downward movement. Investors almost ignored the weak statistics on the US labor market and concentrated all their attention on the ECB meeting, which will be held this week. The market expects the European financial regulator to launch a large-scale program of easing monetary policy and lower interest rates, which may put pressure on the European currency in the coming days.

Today it became known that the largest German banks (Deutsche and Commerzbank) opposed lower interest rates of the ECB. In their opinion, this decision is irresponsible and will put strong pressure on investors. But most experts believe that statements by German banks will not affect the ECB’s actions and the regulator will soften monetary policy amid a slowdown in the eurozone economy.

Today in the economic calendar of the USA and Europe there is no important news, so the main attention of investors will be focused on geopolitical news and the situation on the stock market.

A rather large uncertainty remains on the chart. On the one hand, we see a very strong reaction of the price to the resistance of 1.1085. Sellers are still full of energy and are ready to continue the bearish trend. On the other hand, buyers manage to keep the price above the level of 1.1015, while maintaining the opportunity to resume the upward movement.

Resistance levels: 1.1050, 1.1085, 1.1155.

Support levels: 1.1015, 1.0965, 1.0900.

The main scenario is a rollback to the area of ​​1.1050 and the resumption of movement down.

An alternative scenario is a decline in quotes from current levels with a breakdown of support at 1.1015.

Locally, the market is dominated by a moderately negative fundamental background. On the chart there are signals of the further development of the downward movement. We consider short-term sales of the currency pair from the level of 1.1050.

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