It seems that the eurozone economy is not performing as well as the central bankers want. Earlier today, Mario Draghi, ECB president said, the decline in the eurozone economy may be higher than expected, and this in turn slow down the rise in inflation.
Draggy's comments show that the ECB remains confident of the future inflation growth, backing market expectations for the final closure of the program for quantitative easing. How does this affect the EUR but where to look for profit?
Technical view of EUR/USD
The ECB comments seem to have managed to raise the euro, but not enough to keep EUR/USD on the rise despite the formation of the Double Top. Technically, the pair remains in a rising trend while the price is in the middle of the channel and only close to 50SMA. Delayed eurozone growth and a stabilizing dollar are likely to help the pair test the strong support zone in the range between 1.2050 - 1.2120, where we can look for an appropriate positioning signal with long positions. Demarker is entering an over-sales area, but it does not indicate an end to the decline. We remain awaiting activation of the Double Top formation and reaching the support zone. Entry from current levels will be extremely risky due to lack of good Price Action and positioning levels.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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