Euro is up for a big week with an ECB Meeting on Thursday and a largely telegraphed 25bps cut. Putting things into context we have been seeing a mostly sideways market the past three weeks and before that pushed higher since the middle of April. This to us suggests there will be scope to react to a rate cut even if its already widely expected. Until then we have US data to watch out for today with ISM Manufacturing figures out at 1400GMT.
Resistance
- 1.09812 – March High
- 1.09426 – March 21 High
- 1.08890 – Three Week Consolidation Highs
Support
- 1.08400 – Intraday Consolidation Floor
- 1.07883 – Three Week Consolidation Low
- 1.07733 – 50D Moving Average
EURUSD has once again retreated from its three week consolidation ceiling, the 1.08890 region consistently holding. With an ECB rate cut expected by Thursday our bias for now will be to look for opportunities to price in such a move. Long wicks from the hourly charts just under the said three week ceiling would be a good excuse to short. We could also use a push under 1.08400 as an excuse to jump short. Until the rate decision we would hold off on any buys though failure to cut rates could see us pushing past the consolidation highs by then.
