22, July 2016

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General overview

The ECB left its interest rates unchanged. According to Mario Draghi he expects the Eurozone economy recover in a moderate pace. Mario Draghi stressed that Brexit had a little effect to the inflation outlook in the Eurozone. The USA published the positive Initial Jobless Claims report.

Current situation

The EUR/USD remained under pressure yesterday. The ECB’s news triggered a sharp short-term rally that boosted the euro to 1.1060. However, the rally faded and sellers returned to the market. The EUR/USD closed the day bearish. The resistance is seen at 1.1050, the support lies at 1.1000.

MACD is in the negative area. The histogram decreased which indicates the sellers’ strength. RSI returned to the oversold area, its signal line decreased that also indicates sellers’ strength.

The price is below the bearish 50-EMA which still acts as a resistance in the 4 hours chart. The moving averages (50, 100 and 200) are moving downwards which is a sell signal.

Trading recommendations

The pair is threatening to break below the psychological support at 1.1000 now. A cut through here will aim it at the 1.0950 level.