The dollar was firm overnight as profit takers and perhaps some new soft short sellers pushed both EUR/USD and GBP/USD lower ahead of the pair of interest rate announcements this morning. Both the ECB and MPC elected for a course of no action, which led to a fairly muted reaction following the announcement. The ECB press conference is scheduled for 8:30 a.m. ET this morning and the market will be scrutinizing the rhetoric for signs of rate hike during the next meeting.

EUR/USD remains within 1.2680 and 1.2555 after a powerful third wave push up into the current range. The market needs to hold the potential wave four low of 1.2555 for the uptrend to remain in good standing with the technicians.

The 30-minute chart drills down into the 1.2555 level, which could be setting up for a workout after the downside of the minor, May triangle was broken last night. The retest happened at around 1.2600, which could be setting up a push lower to 1.2555. Keep in mind that the larger, gray uptrend channel remains providing the April-May trend one last chance of continuation through 1.2600. It will likely hinge on the ECB.

This corner will be carrying some EUR/GBP into the conference from the daily and weekly chart setup as shown. A combination of trendline support, measured move AB=CD, .786 retracement, diverging RSI and positively diverging RSI all indicate that 0.6840 should be solid enough support to be long with stops below 0.6820.

Keep an eye on that 1.2555 level and updates will come following the conference.

Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

Disclaimer
The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.