EUR/USD Plunges, Is 1.0950 Up Next? - Forex News by FX Leaders

EUR/USD Plunges, Is 1.0950 Up Next?

Posted Wednesday, September 11, 2019 by
Shain Vernier • 1 min read

The lead-up to tomorrow’s ECB Interest Rate Decision hasn’t been kind to the EUR/USD. Rates have plunged from Tuesday’s close, falling more than 50 pips as of 11:30 AM EST. Given the bearish price action, it appears as though the markets are anticipating an exceedingly dovish ECB.

Thursday is going to be a key forex session for the EUR/USD. Three primary market movers are scheduled: Germany’s Consumer Price Index (August), the ECB Deposit Rate Decision, and U.S. Core CPI (August). By tomorrow at this time, we may be looking at a very different EUR/USD.

EUR/USD: Technical Outlook

At the moment, a bearish bias is appropriate for the EUR/USD. Rates are beneath daily support and trending south of the 1.1000 psyche level.

EUR/USD, Daily Chart
EUR/USD, Daily Chart

If the plunge continues ahead of the ECB statements, these key support levels may come into play:

  • Support(1): 78% Retracement, 1.0960
  • Support(2): Lower Bollinger Band, 1.0958
  • Support(3): Swing Low, 1.0926

Bottom Line: Converging indicators are a good thing as they strengthen an area of potential support or resistance. For the EUR/USD, the area around the 1.0950 handle has two technicals coming together. While certainly not fool-proof, the 78% Retracement and Lower Bollinger Band are set up to deliver at least a bounce in price action.

Until elected, I will have buy orders in queue from 1.0963. With an initial stop at 1.0944, this trade produces 25 pips on a slightly sub-1:1 risk vs reward management plan.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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