EUR/USD Outlook: Bears Remain in Play but Face Headwinds from Key Supports, ECB in Focus

Technical analysis of Forex market

The Euro hit new 3 –1/2 month low (1.1751) in European session on Wednesday. But bears started to face headwinds on approach to key supports at 1.1704/1.1694 (2021 low, posted on Mar 31 / Fibo 38.2% of 1.0635/1.2349 rally), that resulted in subsequent 40-pips bounce.

Negative studies maintain overall bearish picture. Expectations that the ECB will keep dovish stance on Thursday’s policy meeting, adds to negative outlook.

Upticks are expected to provide better selling opportunities, with falling 10DMA to cap consolidation and maintain bearish bias.

Violation of 1.1704/1.1694 pivots would signal reversal of 1.0635/1.2349 uptrend, with negative signal to be reinforced by completion of bearish failure swing on weekly chart.

Bearish daily studies support scenario, but the outcome of the ECB’s meeting is likely to be pair’s key driver.

Caution on acceleration above descending 20DMA (1.1845) that would ease downside pressure and shift near-term focus higher.

Res: 1.1795; 1.1816; 1.1845; 1.1881.
Sup: 1.1751; 1.1737; 1.1704; 1.1694.