FXStreet (Guatemala) – In a preview to the ECB, where Valeria Bednarik, chief analyst at FXStreet asked “Can the ECB bring the EUR back to life?” she offered a technical analyses as follows:
“From a technical point of view, the EUR/USD pair has been unable to establish a clear direction, after the long term bearish trend was interrupted by December’s ECB announcement. After rallying up to 1.1059, the pair entered in a corrective phase that sent price down to the 61.8% retracement of the latest rally, around 1.0710, from where the pair slowly grinded back higher. The former rallies repeatedly met selling interest around the 23.6% retracement of the same rally around 1.0925, with short lived spikes above it being quickly reverted.
True, Year End holidays did little to help the pair in establishing a certain trend, but January is about to end and the pair still lacks direction. In the daily chart, a slightly positive tone prevails, given that the price is consolidating above a flat 20 SMA and approaches to the 38.2% retracement of the mentioned rally, at 1.0790 that has continuously attracted buying interest. In the same chart the technical indicators aim slightly higher, but within neutral territory, while the 100 SMA caps the upside.
At this point, the pair needs to extend beyond 1.1000 to have a bullish chance following the ECB, and advance up to the 1.1060 high. Should the rally extend beyond this last, the next bullish target comes at 1.1120, a level that will likely be reached before the week is over. A break below the base of the range at 1.0790 on the other hand may see a retest of the mentioned lows in the 1.0710 region, leaving the pair then, poised to resume the long term bearish trend.”
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