After the unexpected volatility on Thursday when European Central Bank President Mario Draghi was more dovish than anticipated by emphasizing the downside risks to the euro zone economy and that interest rates could be lowered, the euro/dollar made another death cross on Friday with the 50-day simple moving average falling below the 200-day SMA. Draghi said interest rates would remain at the current low level or lower for an extended period. That’s in stark contrast with the Fed guidance from Chairman Ben Bernanke who has signaled that it will slow stimulus in coming months.
Looking out, the 14-day SMA at 1.3080 is approaching the 50-day SMA at 1.3071 and the 200-day at 1.3074. The 100-day SMA is now at 1.3046 after crossing below the 200-day SMA on June 27. Things are looking technically weak for the euro against the dollar.