Yesterday’s speech by the ECB President, Mario Draghi, which contained bold words of “deploying monetary policy in a way that can and will stabilize inflation”, provided considerable damages to the euro-zone bonds, that declined deeper into negative territory, contributing larger share into the Euro downturn. The troubled currency, Euro, is trading at multi-year lows against majority of its counterparts and signaling a pullback into pair prices.
Meanwhile, here’s brief technical overview of important Euro pairs – EURGBP, EURAUD, EURNZD and EURCAD.
Even if the broader descending trend-channel continue signaling EURGBP downturn, support-line of the channel, also encompassing 161.8% FE of its late January decline, between 0.7000 – 0.6980 region, could provide strong support to limit the pair’s decline. On the upside, yesterday’s high, 0.7105, becomes immediate resistance for the pair, breaking which it can quickly rally towards 0.7180, followed by the 100% FE of 0.7210, and the resistance line of the channel, also including 20-day SMA, near 0.7275-80. On the break of 0.7280, the pair can rally towards 0.7360, 61.8% FE and the 0.7450 resistance levels. Alternatively, a break below 0.6980 could immediately call for the test of 0.6900 mark before the pair plunges to 0.6830 and 0.6780 supports.
Descending trend-channel support, also including September 2014 & June 2013 lows, near 1.3800, coupled with the oversold RSI, are likely reasons that could trigger EURAUD pullback towards 1.3900 mark. A break of 1.3900 minor resistance could fuel the pair’s surge towards 1.3940 and 1.4000, breaking which it can rally towards 1.4060 and the 1.4110 mark, being the channel resistance. Should the pair gathers considerable strength to break 1.4110, chances of near-term up-move by the pair gets negated which in-turn signals the pair’s up-move towards 1.4300 mark. On the downside, a sustained break of 1.3800 could make the pair vulnerable to plunge towards testing 1.3580 horizontal support, with 1.3670 being intermediate rest.
EURNZD is currently resting near 61.8% FE of its August 2013 to January 2015 decline after it broke below descending trend-line support, ranged from September 2013 and connecting lows marked in November 2013 and January 2015. Oversold RSI and the record low prices near the FE restricts the chances of pair’s extended decline towards 1.4000 psychological magnet. On the upside, the support-turned resistance-line, near 1.4610, could become immediate resistance for the pair, breaking which it can quickly rally towards 1.4800 and 1.5000 mark. Moreover, a sustained break of 1.5000 mark could extend pair’s up-move towards testing 1.5230 and the 23.6% of the said move, near 1.5360.
EURCAD seems struggling between descending trend-line support, connecting the multiple lows marked in 2014, and the 61.8% Fibonacci Retracement of its August 2012 to March 2014 up-move. Higher the chances that this supports, 1.3450 and 1.3400, could restrict the pair’s decline and trigger the pair’s up-move towards 1.3580, 1.3650, 1.3720 and the 50% Fibo, near 1.3850. Given the pair’s ability to break 1.3850, chances of pair’s near-term decline get negated and it can easily surpass 1.4000 mark. However, a break of 1.3400 could immediately force the pair to test 1.3300, 1.3180 and 1.3050. On an extended decline below 1.3050, the pair can surpass 1.3000 and test 1.2950, encompassing 76.4% Fibo, that could limit the pair’s decline towards sub-1.2800 mark.
To sum up, with the limited downside and oversold RSI, these Euro pairs can witness a pullback before extending their current decline.
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