What began as a fall to a smaller lower range turned into an avalanche: EUR/USD now trades at 1.1087, below the January 26th lows, sending it to the lowest levels since 2003 – nearly 12 years.
The move came just before the ISM Non-Manufacturing PMI that came in as expected at 56.9 points.
The low so far is 1.1079 before we have seen a bounce back. Update: a second move down sends the pair to 1.1073. And the move goes on, with further pressure.
It is important to note that the euro ignores positive euro-zone data and that the ECB decision tomorrow looms large.
The ECB is expected to present details of the implementation of QE. This QE program is the main driver of the euro lower. The exact implementation details do not matter too much. What matters is how the ECB sees the situation: perhaps optimistic on growth but probably still worried about inflation and keeping the leg on the pedal.
The positive impact of a weaker euro is felt in the euro-zone, but an “all clear” message could derail the recovery while it is still in its infancy. Draghi would probably prefer a weaker euro.
Support awaits at the round level of 1.10, followed by 1.0875. Resistance is at 1.1150 (weak) followed by the round number of 1.12.
Opinion: Get Ready For The Next Leg Lower In EUR/USD Coming Weeks
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