EUR/USD rests at key technical support ahead of ECB

Having declined for the third straight day on Wednesday, EUR/USD is now taking a bear breather at key technical support. However, the relief could be short-lived, as the European Central Bank is expected to talk dovish during the policy review later Thursday. 

Hovers near ascending trendline

The pair is currently trading near 1.1750. That level is currently housing the support of the trendline rising from Sept. 25 and Oct. 15 lows. 

A breakdown would imply an end of the corrective bounce from the Sept. 25 low of 1.1612 and will likely invite stronger chart-driven selling. 

ECB under pressure to ramp up stimulus

"With COVID-19 cases rising and several countries contemplating new restrictive measures, the European Central Bank is again under pressure to ramp up monetary stimulus support," FXStreet's analyst Joseph Trevisani mentioned in the ECB preview note. 

Both France and Germany have reimposed lockdown restrictions. The latest measures are less severe than the ones initiated in April. Nevertheless, according to Deutsche Bank analysts, they are enough to bring about a fourth-quarter gross domestic product contraction when the Eurozone is facing deflationary pressures. 

As such, the ECB is under more pressure than ever to boost stimulus. "The question is not if but when," Trevisani said. 

The single currency's sell-off will likely gather pace if the ECB lays the ground for a December move. On the flip side, EUR/USD will likely pick up a bid if the central bank stays non-committal. 

Apart from the ECB rate decision, the preliminary US gross domestic product figure for the third quarter, the weekly US jobless claims, and the broader market sentiment could influence the pair. 

Stock markets have come under pressure this week on coronavirus concerns, strengthening the haven demand for the US dollar. 

Technical levels