Vang SJC

Since May 2014, EUR/USD continued downward trend and has showed no sign of rebounding. In the last 11 months, the currency pair has lost 23% compared to its high in May.

In 2015 January, EUR/USD broke the support of 1.16289 in November, before loss of 6.8% from its open price. ECB reached a decision to implement 1.1 trillion Euro (1.2 trillion USD) quantitative easing program on 22nd January policy meeting. Right after the announcement, Euro went down sharply and closed at $1.13573, down 2.2% from the open price.

Euro went down sharply and closed at $1.13573, down 2.2% from the open price

Euro went down sharply and closed at $1.13573, down 2.2% from the open price

Since then, EUR/USD keeps going down dramatically. Meanwhile, the strong dollar received support from positive non-farm payrolls.

U.S non-farm payrolls (Source: Forex Factory)

U.S non-farm payrolls (Source: Forex Factory)

On 6th March, the better-than-expected U.S Non-farm payrolls boosted the Dollar Index (DXY) to its eleven-year high (97.76). Therefore, EUR/USD decreased dramatically to its lowest since 2003 September. The currency pair lost 1.7% during the intraday session to $1.08410.

On March 9th, ECB started its QE, leaving the Euro retreat after gaining slightly (0.1% from low of $1.08357 in Asian session and early European session). However, the currency pair hardly changed in U.S session and closed at $1.08522 (down 0.6% from its open).

Today, the market reacted strongly towards ECB’s QE. The price is currently at $1.0817, 0.33% lower compared to the open of $1.08522.

EUR/USD seems to head towards the support of $1.07422 (in 2003 September) which is 70 pips from the current level. There’s great possibility that price may break this support.

However, there’s still a chance that price will rebound and the support turn into a new resistance.

Currently no information updated showing signs of EUR/USD stop going down further. The market is expecting for ECB president Mario Draghi’s statement and Fed’s policy meeting.

Linh Nhan