Euro skidding near the daily low as yet-another rally fades

Technical Analysis

Author: Adam Button | eurusd

Another bounce proves to be of the dead-cat variety

When you can't even hold an 80 pip rally after three-weeks of non-stop selling, then you know it's bad.

EUR/USD is trading 20 pips off the session low and has barely shown life in US trading.

There was some uncertainty about the ECB coming into the week after a 'sources' story speculated that some officials wanted to wait until January to decide on tweaking and extending the QE program. But today Draghi said a decision would be made at next week's meeting.

As for what's next.

Technically it doesn't look good. A rally to 1.08 or 1.09 is something you could call a legitimate retracement. But it's been more than a week of sideways trading and today's failed rally is the closes thing to a bounce.

All this is also taking place just above the 2015 double bottom. If that breaks, it will be a quick trip down to parity. And with the ECB set to ease next week and the Fed to hike the week afterwards, I don't like the euro's chances of holding that line.

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