EURUSD SINKS ON REPORTS THE ECB HAS CUT INFLATION FORECASTS

The EURUSD pair has sunk towards the 1.1204 level, as reports surface that the European Central Bank will cut inflation forecasts at tomorrow's meeting. Reports out this morning claim the ECB will cut inflation forecasts to just 1.5%, extending this low inflationary outlook all the way out to 2019.

Further reports suggest the European Central Bank will also upgrade GDP forecasts to just 0.1%, all the way through to 2019. The news is weighing heavily on the euro currency, with a shallow bounce towards 1.1220 so far, after dropping some seventy pips from the 1.1270 area.

Technically the EURUSD remains bullish whilst trading above the 1.1200 level, with the pair bouncing from the 1.1204 area, which is a significant pivot point for the EURUSD.

Short term indicators, however, are pointing downwards, the former weekly price low at 1.1233 becomes the foremost upside resistance for the EURUSD at current levels.

Should price surpass the 1.1233 level to the upside, the next area of resistance soon becomes 1.1255-57 region, which has been used as a trading pivot for much of this week already.

To the downside, a move below 1.1200 should accelerate losses towards 1.1172 support, with the May 30th former swing low at 1.1109, the next significant support level sellers will be targeting.