EUR/USD plunged after reaching 1.2218 yesterday's high and now is located below the weekly pivot of 1.2178. The DXY rallied right after the BOC and maybe as a reaction ahead of the US inflation data and before the ECB.
The ECB is expected to maintain its monetary policy unchanged, but the ECB Press Conference and the Monetary Policy Statement could bring sharp movements. Also, the US CPI and Core CPI publication, along with the Unemployment Claims could really shake the markets later today.
EUR/USD Downside In Cards!
EUR/USD failed to stabilize above 1.2201 former high and above the weekly pivot point (1.2174) and now it could drop again. The major Rising Wedge pattern is still valid after the price's failure to approach the R1 (1.2246) to he the former uptrend line.
Still, a larger corrective phase could be activated and validated only by a drop and stabilization below the 23.6% retracement level and after making a new lower low. The pair could come back to test and retest the weekly pivot point before dropping deeper.
Forecast!
Today it is risky to pick a direction because anything could happen during the ECB policy announcement and after the US inflation data release. Potential growth will be announced by a bullish closure above 1.2218.
Selling could be signaled if the price makes a new false breakout above the pivot point (1.2174) or through the 1.2201 level.
