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On the daily chart, the EURUSD lost the 20MA and hovered around 50MA. Today, the ECB meeting will offer guidance for the EUR crosses and major. Most of the EUR crosses on the verge of a bearish breakdown.
ECB preview: We and the market expect no monetary policy changes at Thursday’s meeting. But the spotlight remains on Lagarde’s communication skills. The EUR strength is not a concern for the ECB at this meeting as EUR is trading at the level of December 2020.
The upcoming European Central Bank meeting will take place on January 21, 2021, starting at 14:30 CET:
We will trade between 1.2000-1.2220 before Thursday’s ECB meeting. The corrective A-B-C pattern suggests 1.2000 is pivotal.
The back-to-back two-week decline seems to have changed the sentiment. A move below 1.2000 could confirm the reversal pattern, which is likely to trigger more weakness in the short term. But any fall below 1.2000 levels doesn’t change our higher EUR theme. For all the longs, 1.1900/1.1880 is the stop loss. If the price is moving higher, the key resistance levels to watch out are 1.2215 and 1.2285.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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