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With the ECB publishing its decision in a few hours, I’ve got my eyes on a potential break-and-retest scenario on EUR/USD’s chart.

Currency Snapshot:

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • Italy’s quarterly unemployment rate at 9:00 am GMT
  • Euro zone’s industrial production at 10:00 am GMT
  • U.S. PPI at 12:30 pm GMT
  • ECB’s policy decision at 12:45 pm GMT. Read our event preview if you’re trading the release!

What to Watch: EUR/USD

EUR/USD 1-Hour Forex Chart
EUR/USD 1-Hour Forex Chart

In case you missed it, a speech by Donald Trump earlier today failed to inspire risk-taking in the markets. In fact, it did quite the opposite.

The Donald announced the 30-day suspension of travel from Europe (except the U.K.) starting Friday and mistakenly included goods into the ban.

While the goods part has since been cleared up, the confusion of the initial announcement and the travel restriction were enough to tank crude oil and boost gold prices.

The travel suspension is expected to hit the euro zone hard, which adds to the weight against EUR/USD right now. Meanwhile, the European Central Bank (ECB) is publishing its monetary policy decision in a few hours and markets are expecting some form of monetary easing from Lagarde and her team.

On EUR/USD’s 1-hour time frame you can see that the pair has recently broken below (and retested!) a trend line support that had been solid since late February.

Is EUR/USD ready for a reversal? The pair is now limited by a descending trend line below the 100 SMA and looks ready to test its weekly lows. A quick look at EUR/USD’s trend analysis also shows the pair as “bullish but weakening” compared to its longer-term moving averages.

If you’re looking to buy the euro against the dollar, then you can also wait until the pair breaks above the falling trend line and 100 SMA before you aim for March’s highs.

Check out our EUR/USD volatility analysis if you’re not sure where to place your entry and stop loss levels today.