The USD has been very strong as of late, but tomorrow’s ECB meeting may create a pause in the USD’s ascent. The EUR/USD came out of a descending wedge which may create a near term bounce. The EUR/USD may rally back towards the 38% retracement of the recent fall at 1.3230 or fill the gap just above at 1.3240.

Keep in mind tomorrow’s ECB meeting could radically change the look of the EUR/USD depending on how the central bank tailors monetary policy. Also to note, recent CFTC data shows that the non-commercial positioning of the EUR/USD is aggressively short, a contrarian may point out that the EUR/USD may be ready for a near term reversal.

Blake Morrow

Chief Currency Strategist, Wizetrade