EUR/USD Prediction for December 9, 2016

The EUR/USD whipsawed following the ECB meeting where the central bank disappointed market participants with an extension of their asset purchase program, that was combined with a potential tapering of the volume of assets from 80 billion per month to 60 billion per month.  The currency pair initially shot higher, zipping up to resistance near the October lows at 1.0850, but was unable to hold its gains and declined back through support near the 10-day moving average at 1.0659, which is now seen as short term resistance.

Target support on the currency pair is the November lows at 1.0525. Bund yields shot higher, but declined as investors see this move as a dovish tapering as opposed to a hawkish extension.  The RSI (relative strength index) moved lower with price action reflecting accelerating negative momentum, while printing a reading of 40, which is on the lower end of the neutral range.