The Euro is in free fall after ECB and chief Draghi’s remarks on post policy meeting press conference. The pair so far fell nearly 1.5% since ECB’s rate announcement and showing scope for further weakness. Initial negative signal was comment for future rate hikes as the ECB ruled out any rate hike until the second half of 2019. Mario Draghi highlighted solid broad-based growth in the Eurozone and expressed his optimism about underlying inflation, but decision to keep the QE program as significant monetary stimulus is still needed, disappointed traders. My comments two days ago that Euro’s rally is positioning for ‘buy the rumor – sell the fact’ post ECB action proved to be true. Today’s significant fall dented bullish near-term outlook and signals that recovery from 1.1509 low might be over. Double-top that was left at 1.1839/48 is bearish signal as acceleration through a cluster of MA supports, which now reverted to resistances, marked next bearish signal. Bearish acceleration surged through thick 4-hr cloud (spanned between 1.1772 and 1.1674) and currently probing through cloud base, which would generate further bearish signa. Bears need to break and close below 1.1639 (Fibo 61.8% of 1.1509/1.1848 recovery leg) to confirm reversal and expose key support at 1.1509 (29 May low – the lowest since July 2017).
Res: 1.1719; 1.1741; 1.1771; 1.1800
Sup: 1.1639; 1.1616; 1.1589; 1.1509