EUR/USD was knocked out yesterday as the market undigested ECB's reduced QE size by half and simultaneously extended the duration, thus maintaining the same level of stimulus as before. As a result, the pair was on a massive selloff wave dipping from 1.1836 high to 1.1640 low, 196 pips during only eight hours.
Today, EUR/USD extended losses at 1.1624 the months fresh lows with expectations for further dips in the coming days seeing the buck strengthening with 94.74 high today.
Fundamentally, the US Dollar Index is back with a sharper tone sending strong message for all currency rivals as the House of Representatives has passed a budget bill paving the way for Trump's so long waited tax cut plan. The only bump at moment fronting is who will inherit the U.S Fed, still nominees are mixed between Powell and Taylor.
Recent Reports has mentioned that current Yellen is ruled out, but rumors looms that Trump is worried about such scenario which could disrupt the hardy stock market rally that has taken place since his election. The Dow industrials have surged more than 30 percent from the low just a couple days before the November. 8 election.
Last but not least, Spanish tension with the Catalan referendum still vows which add more pressure on the euro.
Finally, this week risk event will be conducted with U.S GDP release today at 12:30 PM GMT with all eyes focused with expectations for a growth during third quarter. The data today will play significantly on the promised late U.S rate hike and DXY levels.
EUR/USD Technical Overview:
Current price: 1.1624
Target: 1.1480?
Closing Price: 1.1652
Trend: Down
Resistance levels: 1.1680, 1.1705 +/- , 1.1763*
Support levels: 1.1540, 1.1480
Trend Reversal: 1.1763*
Down 117.93
Comment: The market triggered a significant downside breakout from sideways congestion of the past month, opening up potential for a bear wave to 1.1480. Trade is poised for continuation selloffs. Any corrections should be rejected up along the lower edges of recent congestion. Only a close over 1.1763* marks a short term turnaround.