The euro fell against the dollar by almost 80 pips, from 1.1730 to 1.1650, after yesterday’s ECB monetary policy meeting. The European regulator has not made any changes to its monetary policy. The ECB left the key interest rate at 0% per annum, and also stressed that the asset buy-back program will end in December (monthly asset purchase volumes will remain at 30 billion euros through the end of September and after that will be reduced to 15 billion euros through the end of December). Mario Draghi also stressed during the press conference that the ECB maintains its positive vision for the European economy and risks remain balanced. ECB experts continue to expect that GDP growth in 2018 will be approximately 2.1% YoY. The head of the ECB stressed that the growth rate of the European economy is beginning to stabilise and that the slow growth in the first half of 2018 was temporary. Yesterday I wrote that, with such rhetoric from the ECB, I expect a depreciation of the EURUSD pair.

Today, according to the Forex calendar, the following important macroeconomic data will be published, which are important when trading on the foreign exchange market:

• 15:30 US: GDP annualized (Q2).
• 17:00 US: Michigan Consumer Sentiment Index (Jun).

On the H4 timeframe, the EURUSD pair remains inside the descending triangle:

The graph shows that yesterday after the ECB meeting, EURUSD reversed from the upper line of the triangle, went down, and now is gradually moving toward the lower line of the triangle (this is marked with a green oval on the chart). The lower line of the triangle is near 1.1530.

On the H1 timeframe, EURUSD formed three peaks at approximately 1.1740:

All three of these peaks indicate that a stable resistance for EURUSD growth is forming on the hourly chart at the 1.1740 mark.

I suppose that today the pressure from the dollar on the euro will continue and if the US GDP data proves to be good, the EURUSD pair could test the level of 1.1600. In my opinion, if US GDP growth for Q2 2018 is 3.5% or above (YoY), then it can be considered as good, and most likely it will positively affect the US dollar. Of course, if US GDP growth for Q2 2018 is significantly lower, then the dollar could correct during the day and return to the resistance level at 1.1740.

I want to emphasise that there is not a downwards trend neither on the H4 nor the H1 timeframes. Therefore, although the pair’s bearish setup remains, it is important to understand that those with short positions should beware: there is no downwards trend and therefore they must be very careful.

At the moment of writing EURUSD is trading at 1.1645.