EUR/USD: Bulls look to ECB for further upside beyond five-week high

EUR/USD takes the bids to 1.1140 while heading into the European session on Thursday. The pair surged to the highest since early November after the US Federal Reserve (Fed) meeting. Traders now await the European Central Bank (ECB) decision for a clear direction.

The Federal Open Market Committee (FOMC) left its monetary policy unchanged while signaling no rate hikes in 2020. Fed Chairman Jerome Powell cited doubts over inflation that might have pushed the Financial Times to believe on Credit Suisse’s analyst Zoltan Pozsar when he says the Fed "tapered the balance sheet too much, too fast. The Fed needs to undo that."

Even so, the pair’s latest gains have been checked by the trade war fears. The United States' (US) deadline for fresh tariffs on China is still on December 15, which China wants to be revoked for further talks. For this, the US President will meet his trade advisers today.

Also contributing to the risk sentiment is the general election in the United Kingdom (UK). Although major polls favor the ruling Conservative Party to keep the help of Britain, a clear majority in the Parliament is what the Tories need to achieve their Brexit goals.

As a result, the US 10-year treasury yields take rounds to 1.80% with the S&P 500 staying mildly positive to 3,147.

While major focus will be on Christine Lagarde's first monetary policy meeting as the ECB Chief, Germany’s November month inflation and Eurozone Industrial Production for October will also the key to watch. The ECB isn’t expected to alter its current monetary policy but could reiterate the push for fiscal stimulus.

Read: ECB Preview: How Lagarde's debut December decision may drive EUR/USD higher, three scenarios

Technical Analysis

October tops surrounding 1.1180 hold the key to pair’s further upside whereas 1.1095/90 keeps the immediate declines limited.