Dovish ECB sent Euro to multi-month low; bearish pressure may increase on strong US jobs data
The Euro trades near fresh multi-month low at 1.1176 (the lowest since June 2017), posted after strong fall on Thursday.
Dovish tones from the ECB which delayed its first rate hike after crisis to 2020, cut economic forecast and launch of new stimulus in form of cheap loans to the banks, hit the single currency which fell 1% on Thursday (the second biggest one-day loss in 2019).
Strong bearish acceleration on Thursday generated bearish signal on break and close below important Fibo support at 1.1186 (61.8% retracement of larger 1.0340/1.2555 ascend).
Weekly close below here would confirm negative signal and maintain bearish pressure for extension towards 1.1093 (the neckline of weekly asymmetric H&S pattern) and psychological 1.10 support.
Oversold daily studies suggest consolidative / corrective action, as traders take profit from Thursday’s strong fall.
Former low at 1.1234 now marks initial resistance, with extended upticks to be ideally capped at 1.1270 (Fibo 38.2% of 1.1419/1.1176 / falling 5SMA).
Mixed signals from EU countries in early European session had little impact on Euro, with focus turning towards US jobs data.
US Non-farm payrolls (Feb 180K f/c vs 304K in Jan) could further boost dollar on solid results today that would increase pressure on Euro, which is on track for the biggest weekly loss since Feb 2018.
Res: 1.1212; 1.1234; 1.1270; 1.1298
Sup: 1.1176; 1.1127; 1.1093; 1.1000