EUR/USD heaviness main theme, ECB nears

By FXstreet.com | August 05, 2014 AAA

FXStreet (Bali) - The heaviness in the strong>EUR/USD has become a regular theme in recent weeks, with the latest decline off 1.3444 (Friday high post US NFP) leading to a new marginal low at 1.3358.

A firm US non-Mfg PMI, coming well above the estimates, was seen as an excellent opportunity by market speculators to add into their USD longs ahead as the sense is that the timing is nearing to start pricing in the potential for a tighter Fed next year.

Ahead of the ECB monetary policy meeting, due on Thursday, "we have the German Factory Orders and US Trade Balance to focus on today, but the market is really going to be looking towards tomorrow’s ECB meeting and Mario Draghi’s press conference", notes Jim Langlands, Founder at FXCharts, who bets for a lower Euro should Draghi "lean towards a dovish tone again..."

In terms of key levels, Jim adds that "the support at 1.3350 (200 WMA) will not last long if Draghi is dovish and the Euro will head towards the next meaningful target at 1.3294 (7 Nov ’13 low)... while on the topside, 1.3400 (100 HMA) will now act as the immediate resistance and I would be doubtful of seeing it much above here today," Jim said.

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