EURUSD eases further from new multi-week high (1.0948) as markets digested ECB’s decision to stay on hold and repeat its mantra that future action will be dependent on incoming economic data.
On the other hand, confidence that the ECB will deliver two more rate cuts by the end of the year continues to strengthen among market participants.
The EU policymakers are not happy with still high prices, which was the main argument for today’s decision, but remain on track for future rate cuts, as high borrowing costs are about to further hurt already damaged bloc’s economy.
From the technical point of view, current easing comes as a result of overbought conditions on daily chart, with limited dips to ideally find ground at 1.0870 (rising 10DMA) zone and not to exceed 1.0840 (Fibo 38.2% of 1.0666/1.0948) to mark a healthy correction.
Conversely, increased downside risk to be expected on loss of 1.0840/00 pivots (Fibo / psychological/converged DMA’s).
Res: 1.0948; 1.0981; 1.1000; 1.1017.
Sup: 1.0895; 1.0870; 1.0840; 1.0800.
