EURUSD: Eurobulls disappointed by ECB meeting

Previous:

• In evening trading the EURUSD pair fell 2.4% after the ECB meeting and Draghi’s statements during a press conference.
• The regulator lowered its 2018 eurozone growth forecast from 2.4% to 2.1%, retained the QE program  until the end of the year, and will lower bond purchases from 30 to 15bln EUR. Draghi also said that the time frames for the rate increase were not discussed in the meeting.

Day’s news (GMT+3):

• 12:00 Eurozone: consumer price index (May).
• 15:30 Canada: foreign portfolio investment in Canadian securities (Apr), manufacturing shipments (Apr).
• 15:30 US: NY empire state manufacturing index (Jun).
• 16:15 US: industrial production (May).
• 17:00 US: Michigan consumer sentiment index (Jun).
• 20:00 US: Baker Hughes US oil rig count.
• 23:00 US: net long-term TIC flows (Apr), total net TIC flows (Apr).

Fig 1. EURUSD hourly chart. Source: TradingView

Current situation:

I did not make a forecast for yesterday, and I would never have predicted an intraday 2.4% drop. Following the ECB meeting, the euro fell to 1.1738 against the dollar. During Draghi’s press conference, pressure on the euro increased.

At the American session, the price moved to the reversal zone (between lines D3-D4). The fall from the level of 1.1852 was 247 degrees. As the price did not immediately leave the reversal  zone, I’m expecting a fall on Friday to the level of 1.1547 against the backdrop of the general strengthening of the American currency. I’m awaiting the formation of three bases with a double bearish divergence. If my expectations are justified, then afterwards we can expect a correction to the level of 1.1640.