As the currency rate was falling the last three weeks in a row, traders used the Federal Funds Rate hike to sell the Dollar and elevate the pair to the 1.1844 level. As long as market sentiment remains predominantly the rate is expected to continue moving in southern direction. As for today, a deep plunge back to 1.1776 seems unlikely, as this road is obstructed by the weekly and monthly PP as well as the 200-hour .
From this perspective, the pair most probably will make another rebound and resume the upward movement towards the upper boundary of a medium-term . However, there is a need to take into account an effect from today’s ECB meeting and American data release, which are likely to alter the above scenario.
Due to dovish comments made by the ECB as well as publication of better than expected result on the American Core Retail Sales, the currency rate managed to break combined support level formed by the weekly and monthly PP as well as three other moving averages. In result of this plunge, the pair has formed two junior ascending channels, which presuppose continuation of an upward movement towards the upper boundary of a dominant descending channel.
However, today an absence of any important fundamental events as well pressure from the above technical indicators suggest that the rate is likely to continue moving towards the 38.2% Fibonacci retracement level at 1.1760. In support of this assumption, 55% of pending orders in 100-pip range are set to sell.