• EUR/USD has bounced off its lows as US yields have been retreating. 
  • The ECB's critical rate decision is set to rock the euro.
  • Thursday's four-hour chart is pointing to gains.

Higher low or lower high? Everything is in the eye of the beholder, and the answer differs between bulls and bears. EUR/USD has pulled itself from below 1.20 as US Treasury yields have been on the back foot, dragging the dollar down. Wednesday's stock market recovery has also helped boost the mood and push the safe-haven greenback down.

COVID-19 cases have begun falling in the US, showing the effects of reaching 40% of its population with one vaccine dose. Britain and even Europe are also on the right path.

However, there are reasons for global markets to hit the ground on Earth Day as coronavirus cases have hit new highs in India – topping 300,000 daily infections – and the situation in other parts of the world remains concerned as well. The explains why some still seek the safety of the dollar. 

Amid this market mood, the European Central Bank announces its decision on Thursday. The Frankfurt-based institution is broadly expected to leave its policy unchanged, with the deposit rate at -0.50% and the Pandemic Emergency Purchase Program at €1.850 trillion. 

However, Europe's quicker immunization effort, America's economic boom, and other reasons may prompt reporters to ask ECB President Christine Lagarde about potentially slowing down the bond-buying scheme or not deploying in full. Back in March, when darker clouds covered the European prospects, the bank announced it would bring forward some of these purchases.

The limited delivery of that promise and a better outlook make such queries all the more relevant. Moreover, the ECB's decision comes less than 24 hours after the Bank of Canada announced it will taper bond buys. Is the BOC an outlier or just the first central bank to act? The ECB will likely take its time with any such decision, but optimism could lift the euro.  

See European Central Bank Preview: Five reasons for  Lagarde to lift the euro

While the news from Frankfurt carries most of the weight, traders will also eye weekly US jobless claims. These fell to 576,000 last week, substantially better than estimated. Moreover, Thursday's release is for the week including the 12th of the month – when Nonfarm Payrolls surveys are held, giving it an extra dose of importance. 

See US Initial Jobless Claims Preview: Optimism doesn't come naturally

Overall, a tilt to the upside from the ECB could boost the euro.

EUR/USD Technical Analysis

Euro/dollar remains in an uptrend, as seen in the four-hour chart – at least while it holds above 1.20, a level that separated trading ranges. The currency pair trades above the 50, 100 and 200 Simple Moving Averages and momentum remains to the upside, boosting bulls.

Resistance awaits at 1.2080, April's high, followed by 1.2110, which was a swing high in March. The upside target is 1.23.

Below critical support at 1.20, the next cushion is at 1.1950, followed by 1.1930 and 1.1860. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD falls toward 0.9600 amid renewed dollar strength

EUR/USD falls toward 0.9600 amid renewed dollar strength

EUR/USD has turned south and declined toward 0.9600 in the second half of the day on Monday. A sharp decline witnessed in the GBP/USD pair and the souring market mood provided a boost to the dollar, lifting the US Dollar Index back above 114.00. 

EUR/USD News

GBP/USD falls below 1.0700 following BoE statement

GBP/USD falls below 1.0700 following BoE statement

GBP/USD came under renewed bearish pressure and slumped below 1.0700 during the American trading hours. In a statement published on Monday, the Bank of England said that they welcome the government's commitment to sustainable economic growth, triggering another GBP selloff.

GBP/USD News

Gold could soon challenge the $1,600 level

Gold could soon challenge the $1,600 level

Demand for the dollar continued at the beginning of the week, resulting in XAUUSD plummeting to $1,626.67, its lowest since April 2020. Concerns about potential recessions undermined the dismal market’s mood, pushing the greenback higher despite its extreme overbought conditions.

Gold News

Bitcoin: Investors need to prepare for volatile breakout

Bitcoin: Investors need to prepare for volatile breakout

Bitcoin price has been devoid of volatility for the last week and has been in a tight consolidation without directional bias whatsoever. This range bound move has formed a triangle pattern which could break either way. 

Read more

Three stocks that will be in the news this week: Amazon, Nike, Micron Technology

Three stocks that will be in the news this week: Amazon, Nike, Micron Technology

The S&P 500 index lost 4.1% last week and left traders melancholy with another week to go in this dreadful September. The S&P 500 index is down 6.6% so far in the month that is already known for poor performance, and most seem to think the pain will continue. 

Read more

Majors

Cryptocurrencies

Signatures