The Euro continued to be under pressure in today’s trading session on back of continued speculation that the European central bank in its meeting would introduce quantitative easing in the form of bond buying program in the coming weeks to kick start a stagnating Eurozone economy.
The dollar on the other hand rallied close to 1- year high which was seen as adding pressure to the euro. Added to these, the concerns that further sanctions on Russia would drag European growth were bought back to fore after reports yesterday showed that the manufacturing growth in the Eurozone economy had contracted. Going forward traders and investors would be keeping a close eye on the situation in Ukraine along with the much European Central Bank meeting to be held on Thursday. Also, the US unemployment report is due on Friday which would be keenly watched to see whether the strength in the US labor market remained intact.
On the hourly charts for the EUR/USD, the euro touched an intraday low of $1.3110, the weakest level seen on the currency pair since September 2013. The EUR/USD has been in a very strong downtrend over the last couple of months forming lower highs and lower lows indicative of the strong selling pressure. The momentum indicators for the EUR/USD continue to be in bearish territory and are showing no signs of a reversal pointing towards the fact that the bears are in total control.
The relative strength index for the EUR/USD on the hourly charts is also exhibiting no signs of strength and is currently trending in bearish territory.
Short EUR/USD at current levels for an intermediate target at $1.2970 with a strict stop loss at $1.3210.
Long EUR/USD only if it closes above $1.3210 for a short term target at $1.3325 with a stop loss at $1.3110.