The European Central Bank left the bank rate unchanged on October 22 at 0.05%, but Euro futures (6E) are still under pressure as the Euro zone outlined their monetary stance. In the press conference there was talk that interest rates could be lowered further in the future, and that the Quantitative Easing (QE) stance could be altered in size, scope and duration. Euro futures are down about 1.5% on day.
From a technical, daily chart, perspective not much has changed. The December contract shows a rising trendline extending back to the 1.0520 low in March. Currently the price remains above that.
The price action is quite choppy though, with the price moving in a sideways (slightly ascending) price channel since September. The October 22 decline has brought the price very close to the bottom of that channel at 1.115. A breakout below it indicates continued short-term weakness, but the longer-term rising trendline is just below at 1.1070.
Figure 1. December Euro FX Futures - Daily Chart
If the price breaks below the channel and the longer-term trendline, that's evidence to suggest that the long-term downtrend (see far left of chart) is continuing, and the price could head back toward the low at 1.0520.
If the price stabilizes above the rising trendline though, it presents a buying opportunity. With a relatively tight stop loss placed below support a long trade can be taken attempting to capture a move back toward the top of the range between 1.1450 and 1.15. The trade offers an attractive reward-to-risk ratio but given the strong selling pressure buyers may wish to see some evidence of a slowdown in the selling in near support before stepping in.