EUR/USD has created a pennant pattern ahead of the ECB rate decision
- The EUR/USD pair has created a pennant pattern (narrowing price range) over the last 1.5 months.
- The European Central Bank (ECB) is expected to stay on hold and reiterate plans to end its QE program in December.
The EU-US trade talks put a bid under the EUR/USD pair yesterday, however, the currency pair is still stuck in a narrowing price range or pennant pattern.
At press time, the currency pair is trading at 1.1733, having clocked a high of 1.1744 earlier today. The pennant resistance is located at 1.1745 and the support is seen at 1.1592.
Focus on the ECB
The ECB is expected to keep rates unchanged. The common currency may close today above 1.1745, confirming a pennant breakout or a bearish-to-bullish trend change if President Draghi shrugs off trade fears and reiterates that ECB's 2.6 trillion euro ($3.0 trillion) bond-buying scheme will end by the close of the year.
However, if Draghi upsets market expectations for a late 2019 rate hike, then the common currency may find it hard to hold on to gains, if any, above 1.1745 (pennant resistance).
Meanwhile, the greenback could find bids if the US June durable goods orders number, due today at 12:30 GMT, beats estimates.
EUR/USD Technical Levels
Key resistance: 1.1745 (pennant resistance), 1.1791 (July 9 high), 1.1852 (June 14 high).
Key support: 1.1711 (5-day moving average), 1.1655 (July 24 low), 1.1575 (July 19 low).
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
