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Last week's main highlight was the FOMC minutes that provided a significant bearish bias to the U.S. Dollar. In the anticipation of the minutes traders began pricing in potential dovish comments from Janet Yellen, while soon after the release the most traded currency pair rocketed to 1.3857, while the highest point at 1.3905 was hit on Friday. However, later, positive PPI and consumer sentiment from the U.S. pushed the pair lower, while Mario Draghi's speech in Washington DC provoked a massive sell-off of the Euro. We have predicted that soon the ECB will start talking down the single currency, however, Draghi's words were most decisive since his pledge to "do whatever it takes" to save the Euro.
Dukascopy Community members believe the pair will continue moving lower this week, with the consensus forecast standing at 1.3818– almost at the same level that was recorded at the time of writing. The pair struggles to go below the weekly and daily pivot at 1.3816, however, a move below it will clear the way for 1.3727. Despite the fact equal number of traders is having bullish and bearish view, vast majority of them mentioned fundamentals from the Eurozone as the main catalyst for the pair. "Last week EUR/USD again approached towards 1.40 mark but faced strong resistance just above 1.39. I think that during this week fundamentals will prevail and hints from ECB about non-conventional measures including QE will weight on EUR," said Rokasltu. More than 65% of traders are holding short positions, while pending orders are placed to sell the pair. In contrast, some traders, including Drishti, claimed there is a strong support at 1.3673, which will limit pair's depreciation and as long as it holds, the outlook is bullish. Keeping in mind Draghi's comments, and signals from technical analysis, this week's outlook is bearish.
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