The euro nosedived against USD at Friday’s session after Mario Draghi’s speech at the ECB’s forum. Last week, the pair opened at 1.1450 and lost 4% by the end of the week. We have been repeatedly advised to book profit or sell with sl 1.1535 from May 14. We forecasted that the pair would be capped between 1.1480 and 1.1535. The pair made a high at 1.1465 and changed its direction towards south. The divergence between ECB and Federal Reserve favours bears in the long term. The ECB executive member said the Central Bank is likely to increase purchase of euro assets ahead of summer. Low-liquidity favor the euro bears. The FOMC minutes provided power to the dollar bulls. The Greek factor is the major bearish factor in the coming days. These fundamental factors made the pair favor selling on a rise. Greece was given four month extension to its bailout in February. On July 20, Greek bond will total 3.5 billion euros matures by the ECB.
Because of lack of economic data, the trading pattern will be driven by the news flow from the US. The Greek debt drama will be the main focus in coming days. Today, we expect soft movements owing to a bank holiday in France, Germany and US. On Friday, German retail sales m/m and Spanish flash CPI y/y were released. The recent German data provided the inconsistent growth.
Weekly technical view: The pair showed a 5-week winning streak lost 4% last week. The pair closed below 20Wsma. The pair closed below the strong support zone at 1.1050 and 1.1030 provided more strength to the euro bears. The pair broke the bearish head and shoulder pattern aiming at 1.0800 in coming days and at 1.0550 later. These factors favor further bearish views the coming days. The 1.1000 is seen at the fib 50.0 entire rise from a low to a high of 1.1465. These targets will be cancelled in case the bulls managed to close above 1.1210. The weekly support is found at 1.0940, which is the last hope for the euro bulls. The monthly gains completely erased.
Support: 1.0940, 1.0800, 1.0660
Resistance: 1.1120, 1.1210, 1.1285
Intraday: The pair has the nearest support finds at 1.1000, the 50.0 fib level entire rise from the lows. The last bulls’ hope lies at 1.0940 50Dsma. A daily close below 1.0940, bears aim at 1.0860, 1.0820, and 1.0800 this week. Intraday trading pattern is found between 1.1050 and 1.0940. We advise to sell on a rise. When Monday’s session opened, bears started selling below 1.1000 with targets at 1.0960 and 1.0945. We advise fresh selling below 1.0940 within the European and American sessions.
Support: 1.0940, 1.0900, 1.0860
Resistance: 1.1050, 1.1120, 1.1170
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