EUR/USD looks to post highest daily close in nearly three months around 1.1240

The broad-based selling pressure surrounding the greenback allowed the EUR/USD pair to extend its rally into a seventh straight day on Wednesday. After touching its highest level since March 12th at 1.1250, the pair has gone into a consolidation phase and was last seen gaining 0.6% on the day at 1.1235.

The safe-haven USD continues to have a difficult time finding demand in the risk-on market environment. Although the US Dollar Index stayed relatively calm near 97.50 during the European trading hours, the macroeconomic data releases caused the index to lose its traction.

The monthly data published by the ADP Research Institue revealed that the private sector employment in the US declined by 2.76 million in May. This reading beat the market expectation for a fall of 9 million by a wide margin. Moreover, the ISM's Non-Manufacturing PMI rose to 45.4 from 41.8 in April to reveal that the business activity in the service sector continued to recover.

Will ECB offer additional stimulus?

On Thursday, the European Central Bank (ECB) will announce its monetary policy decisions. Although the ECB is expected to keep its key interest rates unchanged, investors will keep an eye on changes to the Pandemic Emergency Purchase Program (PEPP).

Previewing the ECB meeting, “an expansion of the €750 billion PEPP, the bank’s bond buying effort launched in March, will likely be accompanied by the long-standing warning that the main burden of European recovery must be borne by the national governments,” said Joseph Trevisani. “The additional PEPP limits and the cheerleading Ms Lagarde will give to the new EU program should keep the euro buoyant.”

Technical levels to watch for