The euro currency extended declines on Wednesday ahead of the ECB monetary policy meeting. The initial euphoria of a possible QE announcement faded as reflected in the bond markets. Yields on the German bonds rose after hitting record lows on Wednesday. The expectations are for the ECB to announce a cut to the key deposit rate but the size of the QE program remains questionable.
EUR/USD Flirts Near Yearly Lows
The currency pair’s declines see a possible move back to the previous lows. The euro currency is trading close to September 3 lows of 1.0925. This comes following a hidden bearish divergence on the daily chart. Watch for a test of minor support at 1.0971. A breakdown below this level could see fresh lows coming off the common currency.