The Euro strengthened on rising bets that the European Central Bank (ECB) may soon announce it will start shooting off its massive bond purchase program.
The central bank’s chief economist Peter Praet, a close ally of President Mario Draghi, said the ECB would discuss next week whether to end bond purchases later this year.
Data indicated that Switzerland’s consumer price index (CPI) rose by 0.4% on a monthly basis in May, more than the 0.3% expected.
On other hand, Japanese Prime Minister Shinzo Abe was set to meet with U.S. President Donald Trump on Thursday and Friday at the White House to discuss a planned U.S. summit with North Korean leader Kim Jong Un next week.
The Federal Reserve is widely expected to raise interest rates for the second time this year at their next meeting on Wednesday.
But many investors are cautions on making big bets due to uncertainties over trade tensions, given U.S. President Donald Trump looks set to clash with other Group of Seven leaders at their weekend summit in Canada.
On the other hand, Mexico announced on Wednesday that it was imposing $3 billion in tariffs on U.S. imports in response to the latter’s triggering duties on steel and aluminium last Thursday.
On the daily chart, the price had successfully broken the ascending trend from the high of 2017, along with the resistance level to eventually reach the key resistance 95.15, to then bounce back from there. The price shaped a reversal pattern (wedge) which closed with a break beneath it.
With divergence in RSI, the price is expected to have a correction to the key support at 92.6 which is located at the broken trend too.
On the daily chart, the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.
The price also broke the support 110.05 to reach the next support 108.15 to get back up again from this level to retest the level at 110.05.
As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support 106.9.
So, any bounce now with price action will enhance the down run.
On the daily chart, we can see that the price is moving sideways between the resistance zone 84.4-84.15 and the support zone 81.2-80.5.
The price has now entered the red resistance area with a possible bounce.
Also, watch the ascending channel which has formed to be considered as a flag pattern. The pattern boosts the original trend which is a down one.
So, any bounce now with price action will push the price to fall.