EUR/USD - EUR/USD under heavy pressure ahead of ECB! - 03/10/2016 (GMT)

The direction of euro in the foreign markets is heavily depended on Mario Draghi’s speech. If the ECB president hinge that further stimulus will take action at a later stage, I would expect the sell-off to be limited, while if he underlines that the bank is done easing, surprise with a non-expected easing tool or even ease more sharply the already applied measures the euro will suffer severe losses.

The EUR/USD pair remains very heavy ahead of the ECB policy meeting, with the pair trading below the significant level at 1.1030, a level that we are consider to be a turning point for the pair. The 1.1030 barrier is a significant obstacle for the bulls, since it coincides with the 4-hour 200-SMA, the daily 200-SMA, as well as the 50-SMA on the weekly chart. Technically nothing has changed for the pair. On the upside, the first resistance will be seen at the important level at 1.1030 and then again at the previous session high of 1.1058. On the other hand, a dovish ECB outlook would drive the pair towards 1.0940, which includes the 50-SMA and then to the psychological level of 1.0900. This should provide a decent hurdle, but a break of which could then open the way to 1.0825, February low. Technical studies support the notion since the 50-SMA achieved a cross below the 200-SMA and the MACD oscillator is falling, ready to step in a negative territory.