EUR/USD jumped to 1.0926 before falling to 1.0900 and is settling just above that for now
The euro pretty much doesn’t have much of a clue on how to react to the mixed message by the German court ruling earlier, as they voted in favour of the ECB but partially objected actions by the central bank with regards to its QE program.
The bottom line is that this won’t have any effect on PEPP – so that’s good news – but essentially it is another can kicked down the road as they are giving the ECB an ultimatum three months to “demonstrate that QE is not disproportionate”.
In short, the sentiment is very much carry on as you were because the ruling wasn’t exactly a ruling per se but more of a convenient distraction.
For EUR/USD, the 100-hour MA (red line) remains the key level that is limiting gains and sellers can continue to use that to lean on to keep the downside pressure going.
The key level to watch now will be the 1.0900 handle as a firm drop below that will open up a test towards the 200-hour MA (blue line) and the 50.0 retracement level @ 1.0869-72.
Those will be key downside levels to watch as a break below that will open up a more bearish near-term bias in the pair towards 1.0820-30 again.