“Luck is what happens when preparation meets opportunity.”
Another sea of Red in the FX market after President Donald Trump announced a ban on all travel from European Union to the U.S on Thursday, while the accommodative measures from the European Central Bank (ECB) yesterday and the surprising rate cut from the Bank of England (BOE) on Wednesday did little to impress the markets.
Indeed, the Single currency fell below $1.1100 after the ECB disappointed markets by leaving rates unchanged, while the stimulus efforts from the ECB failed to calm shattered investors.
However, the announcement that the Federal Reserve Bank of New York would introduce $1.5 trillion in new repo operations this week consoled the markets a bit and halted the euro’s drop to $1.1200 level.
Technical Outlook- Ka-Ching, the EUR/USD slumped more than 300 pips as expected!
Early on Tuesday, the technical outlook on the EUR/USD was flashing amber for a corrective downturn. Here is what we posted on Tuesday 10th March 2020
EUR/USD rally Too Far Too Fast- Don't be spooked by a sudden retracement
“From an Elliott wave perspective, the pair may have completed wave 3) on Monday and could be heading south in the coming days, probably to previous wave 4 of a lesser degree at $ 1.1100, completing wave 4) of an impulsive trend.
On Tuesday 10th March..
On the EUR/USD hourly chart, the explosive rally from a low of $1.1056 on Thursday suggest that wave 4) of the impulsive trend, starting in late February, may have bottomed yesterday. We are now looking for at least a 3 wave pullback to the upside near $1.1320.
Only a decisive break above $1.1350 would confirm a continuation of the upward trend on the EUR/USD to $1.1497 followed by $1.1771.
On the downside, initial support is seen at $1.1055 area with a break paving the way below $1.1000.
However, a move under $1.0907 would invalidate our bullish structure on the EUR/USD.
Listen to the #FOREX summary, presented by Allan Juste, Head of Forex & Derivatives on Radio One here.
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