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EUR/USD plunged to 1.2320

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EUR/USD plunged on Wednesday after comments in the Wall Street Journal from ECB Executive Board member Benoit Coeure, who hinted that the ECB is poised to embark a large-scale asset purchases centered on government bonds. The move was halted by our support-turned-into-resistance level of 1.2410 (R1). The pair declined even more after the FOMC decision and Fed Chair Janet Yellen’s press conference. EURUSD found support at 1.2320 (S1) where it gyrated during the early European hours Thursday. Looking at our short-term momentum studies, the RSI found support at its 30 level and is pointing up, while the MACD fell into negative territory but shows signs of bottoming and is willing to turn around. These signals suggest that we may see small upward movement before the bears prevail again. On the daily chart, the rate is still printing lower lows and lower highs below both the 50- and the 200-day moving averages and this keeps the overall path to the downside.

• Support: 1.2320 (S1), 1.2300 (S2), 1.2250 (S3)

• Resistance: 1.2410 (R1), 1.2450 (R2), 1.2470 (R3)

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