• The USD bulls remain on the back-foot and helped build on the overnight positive move.
• The momentum is likely to remain capped ahead of the latest ECB monetary policy update.
The EUR/USD pair finally broke out of its Asian session consolidation phase and jumped to the 1.1400 neighborhood in the last hour.
The latest leg of a sudden spike lacked any obvious catalyst and could be solely attributed to a mildly softer tone surrounding the US Dollar, which remained on the defensive amid signs of easing US-China trade tensions and slowing inflationary pressure in the US.
The uptick, however, seemed to lack any strong follow-through and was being capped by European Economic Commissioner Pierre Moscovici's comments, raising concerns over possibilities of the French deficit level breaching EU rules.
Investors might also be reluctant to place any aggressive bets ahead of today's key event risk - the latest ECB monetary policy update, due to be announced later during the European trading session.
The European Central Bank is widely expected to leave benchmark interest rate unchanged and stick with the plan to end its asset purchase program after December. However, expectations of a downward revision to the central bank's growth and inflation forecasts for 2019 might collaborate towards capping gains.
Apart from this, investors will closely scrutinize the ECB President Mario Draghi's comments in the post-meeting press conference, where a dovish shift might prompt some trigger a fresh leg of selling pressure around the shared currency.
Technical levels to watch
Immediate resistance is pegged near the 1.1400-1.1410 region, above which the pair is likely to surpass the 1.1440-45 intermediate hurdle and aim towards reclaiming the key 1.1500 psychological mark. On the flip side, the 1.1350-45 region now seems to protect the immediate downside and is followed by the very important 1.1300 handle, which if broken should pave the way for the resumption of the pair's prior bearish trend.
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