Prior to the release of the important German ZEW index and for three straight trading sessions, the EUR/USD is attempting to complete the correction above but its gains did not exceed 1.1323 before settling around 1.1302 at the time of writing. Waiting for stronger catalysts to complete the correction to the upside, the pair is struggling to move higher in an attempt to break out of its downtrend channel near its 21-month low as the euro continues to lose investor confidence as the German-led Eurozone economy slows, prompting the ECB to intervene to introduce new stimulus plans and abandon the idea of tightening their monetary policy soon.
Although the European Central Bank and Federal Reserve Bank announced their monetary policy, the pair did not care about it and kept moving in a tight range under downward pressure. The pair has not been affected by these major events as markets have seen nothing new. The ECB maintained its interest rates level and remains concerned that the Eurozone economy will continue to slow down and promises more stimulus if the economic situation worsens more than the current situation, especially if US trade wars continue. The US Federal Reserve, according to the minutes of its latest meeting, may keep interest rates unchanged for the rest of 2019. They would be patient if they thought of raising interest rates, raising expectations that if things worsened for the US economy, the bank might be forced to cut rates rather than raise them.
European Central Bank President Mario Draghi said recently that the ECB is ready to take further action to help the economy if expectations unexpectedly turn to the worst. Draghi said the bank would take "all necessary and appropriate monetary policy measures" in addition to the steps taken at its meeting on March 7, when it announced new cheap loans to banks and ruled out near rate hikes.
As we mentioned earlier, we now emphasize that the divergence of the economic situation and the monetary policy between the US and the euro area will remain a strong influence on any chances for the pair to correct above.
Technically: We had expected and recommended in the previous analysis for a long time to sell the pair from every ascending level. The EUR/USD is now bearish and the nearest support for the pair is currently at 1.1245, 1.1170 and 1.1050, respectively. On the upside, the German-led Eurozone’s negative economy weakened the correction opportunity further. The pair's current resistance levels are at 1.1335, 1.1400 and 1.1485, respectively.
On the economic front: The economic calendar today will focus first on the ZEW announcement on German economic sentiment and the US industrial production and housing index NAHB.
