The EURUSD plunged below 1.1400 for the first time since November 2003 after the announcement of the European Central Bank purchase program the pair has fallen more than 340 pips. The program will start in March of 2015 and will last until September 2016, corporate and government bonds will be purchased to a level of 60 billion euros a month.
Today on the economic data we have the Markit Manufacturing PMI in January from Euro zone that is expected to rise from 50.6 to 51 signaling that economy is expanding. On the US side we will also have the Markit Manufacturing PMI in January that is estimated to rise from 53.9 to 54 showing that business conditions in the manufacturing sector are improving.
EURUSD fell like an asteroid during yesterday session making fresh lows at 1.1315 and close near the low of the day creating an impulsive candle. The pair is in a well-established bearish phase and has fallen 6.15% since the start of the year. Stochastic in showing an oversold market but even with the pair well into oversold territory, we should not fight the strong downward trend.
Expecting downward move to a Fibonacci extension at 1.1270 on a bounce of a Fibonacci level at 1.1427 (scenario 1).