EUR/USD - Euro-dollar close to key support ahead of the ECB - 04/11/2024 (GMT)

The chart of euro-dollar looks a lot more ‘normal’ than gold, which isn’t surprising since the usual situation for major forex pairs is a sideways trend in the medium to long term. The price is quite close to the medium-term support around $1.07: whether it continues lower depends on the ongoing reaction to the ECB’s meeting and developing expectations for rates in the eurozone as well as sentiment on when the Fed’s first cut could occur.

There’s no sign of saturation here although the price is quite close to the lower Band, possibly confirming $1.07’s importance as a support. However, if the price does manage to break out below there, the next clearly strong support would be October 2023’s low around $1.045. It’s not going to push that far in just a few days, though, and traders should also be aware that a fakeout is possible, especially during the ECB’s press conference when volatility will increase.

A move much above the 100 and 200 SMAs doesn’t seem likely in the near future based on the downtrend on lower timeframes, 9 April’s doji and the relatively strong reaction for a forex pair to inflation. However, a general perception of hawkishness from the ECB might lead to a move back to the value area of about $1.08-1.086.

This is my personal opinion which does not represent the opinion of Exness. This is not a recommendation to trade.