The EURUSD pair reached support so far today on the 1.17 area, but more downside is in the cards. Ever since the last ECB meeting, the exchange rate is talked down continuously by the central bank. On top of that, some interesting developments at the ECB pose risks for further appreciation in the EURUSD rate.
It Started with De Guindos
The ECB’s Vice President, Luis de Guindos, offered an interview for the Spanish newspaper La Razon. While not talking about a specific value for the EURUSD exchange rate, here reiterated, once more, that the exchange rate does matter for the ECB.
After the chief economist Phillip Lane and Christine Lagarde, it was de Guindos’ turn to talk down the EURUSD rate. He offered the same arguments everyone knows already – that the ECB monitors a wide range of economic aspects, the exchange rate included, as it weighs on inflation.
It Continued with the Financial Time
Over the last weekend, the Financial Times published an article saying that the ECB is reviewing its bond-buying tool in fighting the pandemic. Nothing interesting in such a headline except that the regular APP program with extra flexibility when it comes to the capital keys means more easing from the ECB.
Why did the ECB not announce all these during the press conference?
EURUSD Technical Analysis
The EURUSD bullish scenario starts cracking day by day. The pair now broke the dynamic support and looks poised to decline towards the measured move around the 1.15 level.
If we are to look at the pattern, we can say that this is either a double top or a head and shoulders pattern. But it does not really matter as long as the price broke support. Bears would want to trade at market with a stop-loss at the previous lower high and a risk-reward ratio of 1:2.
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