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EUR/USD starts bearish below pivot on ECB week

FXStreet (Guatemala) - EUR/USD finished the week with some consolidation on the 200 SMA that trades today at 1.1348 having lost the territory just pips away from the 1.15 handle earlier in the week.

There is a bearish bias building leading into the ECB meeting later on in the week while a dovish preference keeps the pressure on with speculation that the Central Bank will be extending QE (to €80bn/month until Dec-16) and possibly a depo rate cut to be announced by the end of the year, as noted by analysts at TD Securities, " So there's a risk of jawboning by Draghi at the press conference to help prepare markets for this, particularly after ECB hawk Nowotny declared that “additional sets of instruments are necessary” to meet the inflation target". Nowotny was also hitting the wires over the weekend.

Meanwhile, we will look for impetus else where until then. Later today, China reports GDP and the consensus expects 6.8% y/y. A further highlight will be with German manufacturing PM that comes with the consensus of a drop to 51.7.

EUR/USD levels

Technically, the 200 SMA on the hourly chart offers immediate support with RSI (14) in neutral for the same time frame while price opened below the pivot of 1.1414. Valeria Bednarik, chief analyst at FXStreet explained, "The 4 hours chart presents a bearish tone, with the price having been unable to advance beyond its 20 SMA since last Wednesday, and the technical indicators maintaining strong bearish slopes in negative territory. Friday's low at 1.1330 provides an immediate support, with a break below it required to confirm a bearish continuation for this Monday."

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