EUR/USD Current Price: 1.2031

  • Currencies followed equities amid the lack of macroeconomic news.
  • The ECB will announce its latest monetary policy decision on Thursday.
  • EUR/USD has chances of extending its advance, depends on the ECB.

The EUR/USD pair bottomed at 1.1998 this Wednesday, but it’s ending a second consecutive day unchanged in the 1.2030/40 price zone. FX traders looked at stocks for direction amid the absence of macroeconomic data that could trigger some interest. The dollar advanced as Asian stocks fell, to later decline on the back of the better performance of European and American indexes. Meanwhile, US Treasury yields ticked higher, with that on the 10-year note currently around 1.57%.

The macroeconomic calendar was empty on both shores of the Atlantic, exacerbating sentiment-related trading. On Thursday, the European Central Bank will release the outcome of its latest monetary policy meeting. The central bank is widely anticipated to maintain rates unchanged and keep front loading bond-buying, maintaining the current duration of the PEPP.

With EUR/USD above 1.2000, it is highly likely that President Christine Lagarde will try to down-talk the local currency. The coronavirus pandemic is still taking its toll on the Union, and a return to normal for people and businesses is still far away. Mrs Lagarde will need to find a way to keep supporting the euro area while preventing the EUR from running. On the other hand, the US will publish March Existing Home Sales and Initial Jobless Claims for the week ended April 16.

EUR/USD short-term technical outlook

The EUR/USD pair has a limited bearish scope despite it has lost its bullish momentum. Overall, the risk remains skewed to the upside, although the next directional move will depend on how the market reads the ECB announcement. In the near-term, the 4-hour chart shows that the pair is developing a few pips above a bullish 20 SMA, while the 100 SMA is crossing above the 200 SMA, both well below the current level. The Momentum indicator is crossing its midline into negative levels, while the RSI indicator consolidates around 57, in line with a new leg north.

Support levels: 1.1995 1.1950 1.1910

Resistance levels: 1.2045 1.2085 1.2130  

View Live Chart for the EUR/USD

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