EURUSD bears running out of steam ahead of ECB
EURUSD fades bounce off the lowest levels in almost two decades as traders await the European Central Bank’s (ECB) second rate hike. The major currency pair portrays a four-month-old bearish channel and justifies the downbeat MACD signals to keep sellers hopeful irrespective of the widely-expected 75 bps hike. However, the 61.8% Fibonacci Expansion (FE) of May-August moves, near 0.9850, joins the nearly oversold RSI to probe the quote’s further downside. Even if the bears keep reins past 0.9850, backed by ECB’s disappointment, the pair prices could drop to the 78.6% FE level surrounding 0.9715. It’s worth noting, however, that the pair’s failure to bounce off 0.9715 could make it vulnerable to slumping towards the stated channel’s support line, close to the 0.9600 threshold.
Meanwhile, ECB’s positive surprise could offer immediate strength to the EURUSD and can challenge the short-term hurdle, namely the 20-day EMA level near the 1.0000 psychological magnet. However, the pair’s further advances need validation from late July’s low around 1.0100. Even so, the bulls are likely to remain off the table unless witnessing a clear upside break of the aforementioned channel’s resistance line, at 1.0170 by the press time.
Overall, EURUSD is likely to remain on the bear’s table irrespective of the ECB’s attempt to defend the regional currency. That said, the odds of witnessing intermediate bounces can’t be ruled out.
