Below is what we discussed yesterday morning... Today's surprise ECB rate cut has triggered a knee-jerk decline in EUR/USD to a new multi-month low at 1.3025 from 1.3140/45 prior to the ECB announcement.
All roads point still-lower towards a test of powerful longer-term support at 1.2750. MJP 9/04/14
Ahead of tomorrow's ECB meeting, let's notice that EUR/USD is trading at the very low side of its 4-month downmove from 1.3965 to 1.3110, as traders, investors, and businesses await Mario Draghi's comments about a push towards increasing liquidity to Eurozone banks-- known as TLTRO, or Targeted Longer-Term Refinancing Operations, designed to lend banks money for 4 years at 0.25%, that would then be loaned to the business community.
While EUR/USD is very oversold on my nearer-term work, and could bounce into a recovery rally at any moment, my intermediate-term work argues that such strength should, and will, be used as an opportunity to get short(er) the Euro ahead of a resumption of weakness that fully tests the 2000-2014 support line, now at 1.2740. MJP 9/03/14