EURUSD: Break Below 1.1210 Might Open Doors For 1.1120
The EUR/USD pair managed to bounce from a daily low of 1.1221, ending the day a handful of pips above it and having been confined within a tight range near the mentioned low for the last few hours, presenting a neutral-to-bearish short term stance, as the 1 hour chart shows that the price is below a bearish 20 SMA whilst the technical indicators head slightly lower, barely below their mid-lines.
In the 4 hours chart, however, the price is moving back and forth around a horizontal 20 SMA, whilst the technical indicators are aiming to bounce from their mid-lines, lacking directional strength.
Additional declines below 1.1210 should favor a bearish extension, down to 1.1120 should the dollar remain on demand after the ECB.
US ADP survey missed expectations, as the private sector reported 190K new jobs against a 200K forecast. The American dollar, however, advanced against most of its rivals, particularly gaining against the EUR and the JPY.
Investors entered wait-and-see mode during the American afternoon, as major risk events loom: the ECB will have its economic policy meeting during the upcoming European session, whilst the US will release its monthly employment figures next Friday.
As for the first, the ECB is generally expected to present a dovish stance, acknowledging the current low inflation levels, by downgrading its forecast, and even reiterate its willingness to extend the ongoing QE. The statement may play negatively on the EUR, but markets will likely wait until US employment figures to decide clear trends, as the possibility of a US September rake hike can well be determinate by the report.
Support levels: 1.1210 1.1160 1.1120
Resistance levels: 1.1280 1.1330 1.1370