The ECB’s QE announcement sent EUR/USD down and down, but forex trading is never a one way street and after reaching a very low point, the pair is staging a nice recovery of over 150 pips.
What’s next for the pair? The big event ahead is the elections in Greece that happens on Sunday when markets are close. In the meantime, here are the lines to watch on low ground:
First, the chart, explanations below:
The pair is trading at 1.1280 at the time of writing. It managed to climb over the round level of 1.12 that provided temporary support earlier in the day. Below this line, the new 2015 low was set at 1.1113, just two pips above 1.1111.
Why is this number with all identical digits important? The answer lies in the inverse pair: USD/EUR which is at 0.90 when EUR/USD is at 1.1111. And more importantly, the pair was supported around these levels back in July 2003 and this was resistance in March of that year.
Further below, the very round number is the next line of support and it is followed by 1.0870.
Looking up, we have 1.1313 as immediate resistance: it held the pair temporarily before the recent fall. 1.1373 is the next line of resistance: it was the November 2003 low.
Further above, the pre-QE 2015 low of 1.1460 is weak resistance before teh round level of 1.15.
For more, see the EURUSD prediction.
In our latest podcast, we do an ECB QE rundown, SNBomb effect on brokers, surprise cut in Canada & Iranian oil:
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