The EURUSD pair has spent the overnight session around last evening’s closing price. However, as the trading was about to start in the new day in London, it appeared that the EURUSD was ready to claw back some of its losses, like the AUDUSD and NZDUSD had started doing.
Looking beyond the near-term price action, the EURUSD trend will remain downwards below yesterday’s high of 1.11627, as the price created a lower low by trading below the October 23 low following yesterday’s ECB rate meeting. The strength in the dollar was mirrored in other USD pairs, suggesting that yesterday’s decline might find legs.
Download our EURUSD Q4 Outlook Today!
In the very short-term, the EURUSD might correct to the 50% retracement level of yesterday’s decline at 1.1126, however, between the 1.1126 to 1.1162 level I suspect that traders will short-sell the pair with their sights set on first retracement level of the rally from the October low to October high at 1.1065, followed by the 50% correction level at 1.1029. If the price managed to trade above yesterday’s high, the bullish trend might resume.
Trades will be watching the German IFO index at 9 am London time. Economists anticipate the Business Sentiment index to decline to 95.4 from 95.5. The German info index has a good correction to German GDP, and will probably create some volatility in the EURUSD pair. However, unless the number is very strong or weak, I doubt the trend in the EURUSD will change.