EURUSD carved out a fresh two-week low at 1.1096, weighed by Cable selling following dovish remarks by BoE Governor Carney. The pair met bids below 1.1100 and has repaired to levels around 1.1110. The big two-day fall from highs over 1.1200 on Monday has also broken and breached the 20- and 200-day moving averages. Next key support is the 1.1090-80 zone which is the current confluence of the Daily S1, 61.8 Fibonacci level and 50-day moving average. Below this level is the December low at 1.1000 and the November low at 1.0983. RSI (48) and Stochastics are both indicating further weakness.
In the higher time frames, EURUSD has been trending lower since early 2018, dropping from levels near 1.2500 and posting a 32-month low at 1.0879 in early October, the current nadir. Momentum has faded with the Fed having backed out of its tightening cycle after hiking rates three times last year. Markets are discounting just over 50% odds for the Fed to cut by 25 bps or more by the end of 2020. The ECB, meanwhile, is embedded in a wait-and-see policy stance, compounded by the new President Lagarde.
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