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EUR/USD ahead of the ECB announcement

After a volatile session with the Obama win pushing the EUR/USD as high as 1.286 on Wednesday, it was just a matter of time for the pair to reverse the gains and close in negative territory, as the ECB Chairman suggested that Germany has started a slowdown. The pair started the day on positive footing, but no major movement is expected before the ECB announcement at 12.45pm. The market is clearly in a downtrend as the double-top formation continues to shape. However as the moving averages converge and the RSI threatens channel support on the daily chart, the ECB decision could be the fundamental catalyst that is needed in the market. With traders already pricing in additional monetary support, if Draghi talks down the speculation, we could see the pair pushing higher during the day, which could be seen as a good long-term selling opportunity. Short positions below 1.281 could target 1.273 and 1.269. Above 1.281 look for further upside up to 1.2875.

Dafni Serdari
Market Analyst
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