The past 24+ hours have been rough on EUR/USD bulls. An exceedingly dovish ECB and the suggestion that recent FED rate cuts are only “mid-cycle adjustments” have sent the pair south rapidly. Factor in a somewhat positive U.S. Q2 GDP release and the Greenback is posting significant gains against the Euro.
Late last week, we broke down a key Double Bottom formation on the daily chart just above 1.0925. Since then, market fundamentals have driven a steep sell-off and have the EUR/USD pushing yearly lows toward 1.0900. This is an important level as it has not been tested since 2017.
EUR/USD: Daily Technicals
At press time (1:00 PM EST), it looks as though the EUR/USD is taking a break just above the Double Bottom (1.0926-7). However, the trend is decisively bearish and sellers appear poised to drive rates lower.
Overview: It is a difficult proposition to be holding longs in the EUR/USD at the present time. Given that the Friday session includes U.S. Durable Goods Orders (August), NonDefense Capital Goods Orders (August), and the Michigan Consumer Sentiment Index (September), the Greenback may be in for an extended rally against the Euro. If today’s Q2 GDP figures are any indication, be on the lookout for Friday’s numbers to hit or exceed expectations.