EURUSD Breaks Below Key Support Line as Rate Hikes Unlikely in 2019 & ECB Makes Billions of Euros Available

 

  • The EURUSD was unable to stop the selling pressure overnight, following the ECB's announcement to make billions of Euros available at cheap rates to try and stimulate the economy.
  • The ECB funding is usually available for up to four years, but these loans will have a maturity of two years.
  • The ECB also kept rates on hold, which was largely already priced in.
  • Draghi did suggest that a rate hike in 2019 is highly unlikely, which put further pressure on the Eurodollar.
  • You can view the recent ECB monetary policy decisions here.
  • Traders have been watching the descending triangle pattern since early January 2019.
  • Short term support, at 1.1270, was broken convincingly last night.
  • The medium and long-term support was also broken, which went back to the 12th of November 2018.
  • This could be a significant bearish break of support for the Eurodollar.
  • Breakout traders may be looking to ride the momentum lower. In case of a false breakout to the downside, traders should incorporate good risk management practice.
  • The Euro has fallen over 200 pips in the last five trading days.
  • Completion of the long-term descending triangle could potentially see the Eurodollar reach 1.1066.

EURUSD Breaks Below Key Support Line as Rate Hikes Unlikely in 2019 & ECB Makes Billions of Euros Available


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