Lagarde Dovishness Helps Push Euros Lower EURUSD EURCAD EURAUD
Lagarde Dovishness Helps Push Euro Lower: EUR/USD, EUR/CAD, EUR/AUD
The ECB met today, and as expected, left rates unchanged. Also as expected, ECB members said they will wait until the December meeting when staff projections will be released until making their next move. However, during the press conference afterwards, ECB President was extremely dovish noting that there is clear deterioration in their outlook and that there is little doubt that the ECB will act in December. As a result, Euro pairs have extended their losses so far today.
EUR/USD
The EUR/USD has achieved its target from the breakdown of the triangle near 1.1700 and has pushed below horizontal support near 1.1690 to its lowest levels in over a month. Next support is the September 28th lows near 1.1615. Bears will be looking to enter shorts near at prior resistance near 1.1690/1.1700. The RSI is in oversold territory on a 240-minute chart, so a bounce is not out of the question.
Source: Tradingview, City Index
EUR/CAD
EUR/CAD has been strengthening over the last few weeks with the weakness in Crude oil (weakness in CAD as well), trading in an upward sloping channel since putting in lows on October 14th just below 1.5400. Today’s comments from the ECB helped to push the pair back towards the bottom of the channel with a large bearish engulfing candle on the 240-minute timeframe, overtaking the bearish crude theme. 1.5562 is the 38.2% Fibonacci retracement level from the October 14th lows to today’s highs. The bottom trendline of the rising channel crosses near this point as well at 1.5542, and then the 50% retracement level at 1.5528. Although EUR/CAD may bounce off the support, sellers may enter at horizontal resistance near 1.5600.
Source: Tradingview, City Index
EUR/AUD
EUR/AUD looks a lot like EUR/USD before it broke lower out of the triangle: lower highs and lower lows. With the bearish engulfing candle on a 240-minute timeframe, watch for the pair to possibly head lower towards support at the bottom of the triangle near 1.6460. The pair will need to close below 1.6590 to make that next move! Resistance is at todays highs and the downward sloping trendline near 1.6690.
Source: Tradingview, City Index
With the dovishness of the ECB and the national lockdowns in Europe, Euro pairs are lower today. As long as these 2 factors remain a constant for Europe, the Euro should remain under pressure.
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