The euro dollar reversed earlier losses following the ECB rate decision and kept the potential bullish Gartley pattern intact. The ECB recovered earlier losses as markets expect the ECB to become more reliant on fiscal policies to help boost the eurozone and signaled the restart of the bond buying program would be open-ended.
Price action on EUR/USD daily highlights today’s volatility saw a close retest of the September 3rd low of 1.0928. The potential bullish Gartley pattern that formed at the beginning of the month is still valid and could see bullish momentum target the 1.1130 level. Major resistance remains the 200-day SMA which currently trades around the 1.1260 level.
If the bullish pattern is invalidate, we could see downward pressure target the 1.0810 region. The 1.0650 level could provide major support.
In the short-term, we might see the euro remain somewhat rangebound as markets become focused with next week’s Fed rate decision. Dovish expectations are pretty high for the Fed and we could see the key takeaway be some disappointment with the Fed’s hesitation in committing to an easing cycle.