Euro Tests Support at 200-day Moving Average as ECB Rhetoric Provides Headwinds

Posted On 16 Sep 2015

The euro is trading at lower levels Wednesday, despite softer than expected U.S. data on Tuesday which included a miss on headline retail sales and industrial production. ECB-speak which included comments from Constancio where he said that the small size of the central bank’s bond-buying program to date gives scope for more action, and his colleague Nowotny said that an extension in QE is possible.

The EUR/USD currency pair dipped to a six-day low of 1.1227, testing the 200-day moving average that is presently sitting at 1.1229. Constancio’s and Noxotny’s remarks seem well timed, being a day ahead of the Fed’s decision tomorrow, with Eurozone policymakers perhaps eager to undermine any perceived safe-haven credentials of the euro.

Resistance on the currency pair is seen near a downward sloping trend line that connects the highs in August to the highs in September and comes in near 1.1280. Momentum remains positive but the trajectory of the MACD is now flat reflecting the currency consolidation ahead of Thursday’s Fed meeting.

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Source:: Euro Tests Support at 200-day Moving Average as ECB Rhetoric Provides Headwinds

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