The Euro was simply trashed at the start of the trading session today. It not only traded lower against the US dollar, but also fell against currencies such as the Japanese yen and the Australian dollar. The ECB might be announcing easing measure during the upcoming meeting. This expectation has caused a downside reaction in the Euro. It might head lower in the short term, as there is a lot of bearish pressure currently. There are some releases lined up during the London session today, which might cause swing moves in the Euro pairs. If the outcome misses the forecast, then the Euro might come under severe bearish pressure.
There was a contracting triangle formed on the hourly chart of the EURJPY pair, which was broken recently by the Euro sellers. The downside was swift, as the Euro traded below the 144.00 support area. Moreover, the pair also opened the week with a gap lower and currently the Euro buyers are trying to fill the gap. There is a chance that the pair might spike higher towards the broken support area where sellers are expected to appear again. The most important resistance is seen around the 38.2% fib retracement level of the last leg from the 147.21 high to 143.14 low. So, any major correction might call for sellers to take control.
If the EURJPY pair moves lower, then initial support is seen around the last low of 143.14. A break below the same might call for more losses towards the 142.80 level.
Overall, one might consider selling rallies as long as the pair is below the 144.20 resistance area.
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Posted By Simon Ji of IKOFX
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