EUR/USD ready to return back below weekly PP

Yesterday the EUR/USD cross rallied by 67 pips during the trading session, which ended strongly in favour of the bulls. Temporary support for the Euro was coming from the disappointing US statistics. We expect the market to refocus back to the ECB meeting. A slump below 1.0615 (weekly PP) is quite likely on Wednesday. Mid-term bearish targets remain unchanged, represented by the cluster of supports at 1.0552/19. Meantime, any advance past the weekly R1 (1.0665) will meet a strong resistance in face of monthly PP, 20-day SMA and weekly R2 at 1.0711/39.

The bullish portion of SWFX open positions accounts for just 45% on Wednesday, down from 49% yesterday. Meanwhile, 100-pip pending orders have a minimal bearish advantage of 52%.