EUR/USD: A tilt to the upside from the ECB could boost the euro to 1.2110

EUR/USD has bounced off its lows as US yields have been retreating. To 1.2110 or 1.1950? Lagarde is set to break the tie between bulls and bears, Yohay Elam, an Analyst at FXStreet, reports.

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The ECB's critical rate decision is set to rock the euro

“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. This explains why some still seek the safety of the dollar.” 

“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.” 

“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.”  

“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.”