The euro is trading below 12-year lows against USD. The euro fate will be decided on Wednesday. We expect the Federal Reserve to hike interest rates by 0.25% in June or September. The euro is the most effecting currency due to the divergence policy of the Central Bank. The ECB is dovish and interest rates are likely to be low for year to come. The Federal stands on a hawkish tone. This divergence proves more downside room to this pair. Today, traders eye ECB Governor Draghi's speech. It's busy data packed with major economic data on the euro and USD.
We have been recommending to trade with a target at 0.9000 for the last three weeks. Last week, Goldman Sachs forecasted the same targets for 2015 and 2016. Parallel support is seen at 1.0335. The euro is trading lower against the US dollar ahead of today's series of data. Intraday supports is seen at 1.0480 and 1.0460. In case the price closes below 1.0495, bears can challenge 1.0335 and 1.0310 levels in a near term. Weekly resistance is seen at 1.0700. We recommend intraday selling below 1.0460 with targets at 1.0425, 1.0380, 1.0350, and 1.0335. Intraday resistance is likely to be set at 1.0505 and 1.0580.
This week is packed with central banks' decisions. The BoJ's monetary policy is due for release on Tuesday. Oil prices continue to be under pressure. This pair is expected to be influenced bu decisions of the ECB and BoJ in the comming days. Ahead of Draghi's speech, the euro is trading lower against the yen at the Asian session. The cross broke 200Wema, 200Msma and 200Mema as well. These factors represent more bearish views. In the previous week, the pair fell and closed below 200Wema. Parallel support was found at 125.00 and 122.20. In the h4 chart, we can observe distribution around the level of 129.00. We forecasted bears would be able to challenge 128.00 and 125.00 in near and short terms in case the price closed below 129.00. The cross made below at 126.90. The lowest lows and lower highs have been developing on the h4 chart, suggesting more room for a downside is yet to come. Initially, we advised selling at 132.35 with target at 129.00 and recommended lower targets at 128.00, 125.00, and even 122.50. Intraday resistance is seen at 128.30 and weekly resistance is seen at 129.65 and 130.15. Until the price closes below 129.65, use every rise to sell. Intraday support is likely to be found at 126.80.For intraday, we recommend selling below 126.80 with targets at 126.60, 126.00, 125.60, and 125.20. Until the price closes below 130.15, a monthly bearish view remains in play.
Trade: Selling below 126.80
Uitgevoerd door, Analytische expert
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