The Euro is trading lower on Wednesday after European Central Bank President Mario Draghi said on Wednesday that policymakers could delay a planned interest rate hike again if necessary. Speaking at a conference in Frankfurt, Draghi said that “adjusting our rate forward guidance” is an option to fulfill the bank’s inflation target.
At 14:49 GMT, the EUR/USD is trading 1.1254, down 0.0011 or -0.11%.
“Our current reaction function is well designed to respond to further delays in inflation convergence. In such a situation, just as we did at our March meeting, we would ensure that monetary policy continues to accompany the economy by adjusting our rate forward guidance to reflect the new inflation outlook,” Draghi said.
Daily Technical Analysis
The main trend is up according to the daily swing chart. However, momentum is trending lower. The market is also trading on the weak side of a retracement zone, helping to contribute to the downside bias.
The short-term range is 1.1177 to 1.1448. Its retracement zone is 1.1281 to 1.1313. Trading on the weak side of this zone makes this area new resistance. Another target is the major Fibonacci level at 1.1185. This level is support.
Daily Technical Forecast
Based on the early price action and the current price at 1.1254, the direction of the EUR/USD the rest of the trading session is likely to be determined by trader reaction to the price cluster at 1.1247 to 1.1248.
A sustained move over $1.1248 will indicate the presence of buyers. If this generates enough upside momentum then look for a potential retest of the Fibonacci level at 1.1281. This is a potential trigger point for an acceleration into the 50% level at 1.1313
A sustained move under 1.1247 will signal the presence of sellers. This is a trigger point for an acceleration to the downside with the next target angle coming at 1.1212.
Basically, look for a potentially bullish signal on a sustained move over 1.1248, and the selling pressure to continue on a sustained move under 1.1247.