EUR/USD's grind lower persisted Wednesday, setting a 3-1/2-month low before a bounce ensued, and there's the potential for a much deeper slide.
The 50-day moving average looks set to cross below the 200-day moving average which, should it occur, would complete a so-called death cross.
Short-term EUR/USD trends in place prior to instances of the 50-DMA moving below or above (golden cross) the 200-DMA turned into longer-term trend with significant rallies or drops.
As it stands the cross below the 200-DMA could occur Thursday.
The ECB meeting ends Thursday, which could be a catalyst for the next EUR/USD move lower.
The ECB altered its inflation target to 2% from "below but close to 2%" on July 8.
ECB President Christine Lagarde said now is the time to show persistence in reviving inflation nS8N2KW084.
Speculation among investors for additional ECB stimulus could be growing as the governing council will need to back up its rhetoric or risk losing some credibility should they fail to do so nL8N2OV4WL.
If the ECB aftermath does trigger the death cross, EUR/USD downside risks will increase, making supports near 1.1700 and 1.1600 vulnerable as the probability of a longer-term decline increases.
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