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Chart of the Day: EURUSD

The EURUSD hits pause this week just ahead of tonight’s European ECB meeting and looks to hold on its gains from September lows, as ECB president Mario Draghi gives his final speech at the helm.

EURUSD daily chart
"EURUSD daily chart"

The pair gained strong traction from September lows putting a medium- and long-term downtrend in jeopardy after progress on Brexit and the US-China trade war. Markets are expecting no change to the ECB deposit rate and given the September rate reduction and QE announcement, it is highly unlikely there will be a meaningful monetary policy move until the first half of 2020.

In our technical forecast, the EURUSD had a strong rise with the current 1.13000 level key support ahead of tonight’s meeting. The medium-term downtrend from June highs is broken, as we anticipate the pair will consolidate around these levels ahead of the next move. A strong break above the 1.1179 high will give bidders confidence to push the pair higher as we confirm the September low a bottom. For any further consolidation on the downside, we see a 38.2% and 50% Fib. level at 1.1100 and 1.1000 respectively as strong support.

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