With traders stripping back odds for an ECB rate cut, the stage seems ready for EUR/USD to rally in the wake of weaker-than-expected U.S. employment figures.
On Thursday, the European Central Bank (ECB) abstained from signalling at an interest rate decrease and also drove back the timing of the liftoff. The central bank also unfolded the opportunity to buy more bonds or cut rates if required.
Even so, money markets cut their odds for an ECB rate cut. The money market now perceives a thin probability of a cut in the deposit rate before July 2020, versus with March 2020 priced in ahead of ECB’s rate decision.
EUR/USD – Technical Outlook
On the technical front, the EUR/USD has formed a bearish channel on the daily timeframe which is providing resistance around 1.1310. That’s also a double top pattern and closings of recent candles below this level is making this level stronger.
At the moment, the pair is retreating at 1.1267 facing the next support at 1.1214, followed by 1.1194 and finally 1.1116. On the other hand, a breakout of 1.1309 would target 1.1323 and then to 1.1343.
EUR/USD – Trade Tips
Considering staying bullish above and bearish below 1.1310 to target 1.1400 on the upper side and 1.1209 on the lower side. All the best!