EUR/USD briefly rallied after the ECB announcement, but its rapid reversal has eroded June's gains and should lead to lower levels.
The ECB disappointed bulls when it noted key rates will remain at present levels through Summer 2019, which is a delay to market expectations. He provided little optimism for EUR/USD bulls, saying the aim was to remain patient, prudent and persistent while also noting that the APP is not disappearing and remains in the toolbox.
The tone of the ECB contrasted with the Fed, which leaned toward more aggressive rate hikes after yesterday's meeting. The diverging paths should keep yield differentials solidly in favor of the greenback, thereby limiting EUR/USD rallies.
Price action after the ECB has left technicals favoring EUR/USD weakness.
A bearish outside candle is forming on daily charts, EUR/USD has fallen below the 21-DSMA, RSIs are biased down and a long upper wick is in place on June's candle.
A run to May's low looks likely.
If that and the 1.1500 level break, the next leg of the bear market begins.
chart: Click here