EUR/USD: Signs of drifting lower but slowly – OCBC

EUR/USD traded lower amid USD strength and dovish ECB speaks. Economists at OCBC Bank expect the Euro to remain under downside pressure.

Bearish momentum on daily chart

“Known dove, Panetta warned about possible overtightening and that he favours smaller rate hikes. Another ECB-dove, Stournaras said ‘there’s been a visible slowdown in inflation and a slight strengthening in economic activity, fuelling hope that the new round of quarterly forecasts will be better’. That said, other usual hawks reiterate their stance. Nagel said he does not think interest rates are at restrictive levels yet and it is a mistake to ease monetary policy too quickly.”

“Bearish momentum on daily chart intact while RSI fell. Risks are skewed to the downside.”

“Support at 1.05, 1.0460 (38.2% fibo retracement of Sep low to Feb high).” “Resistance at 1.0675 (23.6% fibo), 1.0720 (50 DMA) and 1.08 (21 DMA).”