Despite a release of better than expected US purchase orders data the currency rate did not manage to bypass the 55-hour and soared in the opposite direction. The main drivers that pushed and are continuing to push the pair to the top are expectations on the upcoming ECB meeting. On the one hand, the currency rate faces two notable resistance levels near 1.1835 and 1.1850. The first one represents an upper trend-line of an alleged , while the second one represents an upper boundary of a large . However, if the central bankers’ meeting produces a decision about cutback of the quantitative easing program the Euro might easily break through these barriers and reach the 1.1900 mark.
The common European currency collapsed against the Dollar after the ECB President Draghi cut the size of asset purchases but prolonged the quantitative easing program for nine months.
From technical point of view, this event signified a breakout from symmetrical triangle pattern. In other words, the pair bounced off from a combined resistance formed by the 55-day SMA and the upper trend-line of a dominant descending channel.
During today’s trading session bulls are likely to try to recover the Euro. However, these attempts are expected to fail, as the pair will need to cross the monthly S1 at 1.1658 and the weekly S2 at 1.1662. On chart this scenario even more unlikely, as the northern side there is additionally secured by the 100-day SMA.