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  4. EUR/USD Bearish below 1.1000

EUR/USD Bearish below 1.1000

July 20, 2016 08:41

This week's focus is on ECB rate decision and conference tomorrow. I don't expect any changes in rate decision and ECB should come with a more accommodative stance. ECB should be focused on Italian banks as some of the banks have a bad loans ratio of nearly 40 % on their loan books. However, the Italian Govt is not supportive of bailouts. As a result Italian stock market has been hammered the last 12 months. Will there be a special deal? We will see tomorrow. Additionally, ECB might give us a cue about their post Brexit stimulus measures. Any dovish statement will tank the pair further to the downside.Adding to a weaker EUR is USD positive data.

Technically the EUR/USD spiked from 1.1045 zone towards 1.1080 resistance yesterday but failure to proceed further turned bears in control. It looks like a sell on rallies. The pair has broken through the bottom of the running bearish pennant and it needs to close below 1.0990 to proceed further towards 1.0950 and 1.0930. A break below 1.0930 will target 1.0880. Pullback towards 1.1100-1.1090 POC ( EMA89, 61.8, H4) could be used for shorts.

Additionally retests of 1.1030 could be good for short term sell setups.

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