EUR USD Rally Repelled at 1.4177

Once again sellers repelled the EUR USD as it attempted to run stopsover the last main swing top at 1.4177. The subsequent closing pricereversal top and close under a key retracement zone at 1.4042 to 1.4112are indications that this break may have attracted some real sellingpressure.

Daily Analysis

Once again sellers repelled the EUR USD as it attempted to run stops over the last main swing top at 1.4177. The subsequent closing price reversal top and close under a key retracement zone at 1.4042 to 1.4112 are indications that this break may have attracted some real selling pressure.

A follow-through to the down side tomorrow is needed to confirm the reversal top. If this pattern is verified, then look for a minimum retracement to 1.3950 to 1.3903.

The only indication that this market may be starting another leg down is the closing price reversal top. Traders may have been hesitant to buy strength today because of the European Central Bank meeting on July 2nd. Furthermore, news that Euro Zone prices fell, could be indicating the start of a deflationary cycle kept pressure on the EUR USD most of the day.

The ECB has room to cut interest rates but a few days before the scheduled meeting traders were content that they would leave interest rates unchanged. Now that the thought that the ECB may lower its benchmark rate has been tossed out there, sellers are showing up. News that prices dropped may also force the ECB to consider another stimulus plan to revive the economy.

Daily Chart

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