Currency Prediction for the EUR/USD for May 5, 2016

The EUR/USD was down for the third consecutive day prompted by a dovish ECB bulletin.  The exchange rate slumped to support near the 10-day moving average at 1.1382, before bouncing back to the 1.14 handle.  Resistance is seen near Tuesday’s highs at 1.1616.  While momentum is positive the MACD trajectory is flat which reflects consolidation.  The RSI moved lower with price action reflecting accelerating negative momentum, while printing a reading of 55, which is in the middle of the neutral range and reflects consolidation.

ECB to keep appropriate degree of monetary accommodation and use all tools available within the central bank’s mandate if warranted, according to latest economic bulletin. The central bank clearly is keeping the door to further action wide open, although at the moment Draghi seems firmly in wait and see mode and focused on the implementation of the measures already announced.