Trades at lowest level since December ECB rate decision
The EURUSD has cracked the swing lows from and December at 1.0795 and 1.0801 respectively and trades at the lowest level since the ECB rate decision on December 3rd. That was the day that rates were cut, QE was extended in time, but QE was not increased in size. The EURUSD had a 450 pip range for the day.
Looking back at that day, the rate decision announcement led to one surge higher (see 5 minute chart below). The 2nd wave higher started at 1.0788. That level was cracked in trading today as the price extended to a low of 1.0780. The price is back above the 1.0788 as I type.
Is that enough for the day? Well the area has levels of importance from the 1.0788 to the 1.0801. The failed break may give sellers a cause for pause, but you can be sure traders will be watching if the price can extend back above the 1.0801 level. That is the absolute minimum level for buyers to take back a little control in trading today. Above that, the midpoint of the last leg lower comes in at 1.0822 and the low from the Asia-Pacific session comes in at 1.0826.
Will the dollar follow the stock market and if so what is that looking like?
The S&P index tumbled below the 100 day MA at 2023.75 and the 38.2% of the move up from the August low at 2021.18. The index also fell briefly below the low from December and the 50% of the move up from the same August low at the 1993 and 1991.74 levels respectively. The low price today printed 1989.68. If that is the low, a move above the Dec 18 low at 2005.33 will be eyed followed by the 2021.18 and the 100 day MA at the 2023.73 levels.
