Euro Falls, ECB Decides to Keep Policy Rates Unchanged【January 26, 2024】

January 26, 2024

Markets Analysis

Fundamental Analysis

  • ECB decides to maintain policy rates, considering a rate cut premature.
  • ECB President suggests a potential rate cut around summer, but markets anticipate a 90% chance of a rate cut in April.
  • Euro-dollar remains volatile near the 200-day moving average.

EURUSD Technical Analysis

Analyzing the daily chart of the Euro-Dollar exchange rate. The 200-day moving average currently acts as a support line, but the market is unstable, moving within the Ichimoku Cloud.
A significant support line exists at USD 1.0824, having rebounded twice. The market’s expectation of a rate cut poses a downside risk for the Euro-Dollar.
A breach below the 200-day moving average could lead to a further decline. The RSI is at 45, indicating a continuing downtrend. A bearish stance is appropriate in the long term, with potential declines to USD 1.0625 if the 200-day average is breached.


Day Trading Strategy (1-Hour Chart)

Analyzing the 1-hour chart of the Euro-Dollar exchange rate. USD 1.0824 is a monthly support line, with the 240-day moving average converging nearby. Breaking below this level could trigger a sharp decline. The current 240-day moving average is suppressing the upside, with a future potential for a downward breakout.
Fundamental analysis predicts a Euro-Dollar downtrend due to ECB’s inclination towards rate cuts and strengthening of the dollar.
The trading strategy focuses on downward movements, considering sell positions near USD 1.085, with a target around USD 1.075 for settlements. Set stop-loss if the price rebounds without breaking below USD 1.0824.

Support and Resistance Lines

Upcoming significant support and resistance lines:

USD 1.0824 – Monthly support line
USD 1.0750 – Past support line


Market Sentiment

EURUSD Sell: 38%, Buy: 62%

Today’s Important Economic Indicators

Economic Indicators and EventsJST (Japan Standard Time)
Bank of Japan Monetary Policy Meeting Minutes8:50
U.S. Personal Consumption Expenditures Core Price Index22:30

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.

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