EUR/USD Technical Analysis: Bullish breakout confirmed ahead of the ECB

EUR/USD's daily chart is reporting a bullish setup.
The pair is on track to test key trendline resistance at 1.1153.
The ECB President is expected to stress the need for fiscal stimulus.

Omkar Godbole FXStreet Contributor

EUR/USD is reporting a bullish breakout ahead of the European Central Bank (ECB) rate decision.

The pair closed above the Dec. 4 high of 1.1116 on Wednesday, confirming a bullish higher low and higher high setup on the daily chart.

Wednesday's close has set the pair on the path to test the resistance of the trendline falling from September 2018 highs. At press time, the resistance is located at 1.1153.

The Governing Council of the ECB is set to announce the rate decision and publish the policy statement at 12:45 GMT and 13:30 GMT, respectively.

The central bank is likely to keep rates steady and back the minutes from the October meeting, which called for patience to let the new easing package take effect on the economy and the inflation outlook, according to the Research Department at BBVA.

Moreover, the new President Christine Lagarde is likely to stress the need for more efforts on the fiscal front.

That could bode well for the EUR, especially since the Federal Reserve on Wednesday sounded dovish by citing high inflation as the prerequisite for rate hikes. The short-term bullish setup would be invalidated if the pair finds acceptance below 1.1040 (Dec. 6 low), invalidating the higher lows setup.

Daily chart

Trend: Bullish

Technical levels

EUR/USD

Overview
Today last price	1.1136
Today Daily Change	-0.0003
Today Daily Change %	-0.03
Today daily open	1.1139

Trends
Daily SMA20	1.1057
Daily SMA50	1.1063
Daily SMA100	1.1066
Daily SMA200	1.1155

Levels
Previous Daily High	1.1146
Previous Daily Low	1.107
Previous Weekly High	1.1116
Previous Weekly Low	1.1002
Previous Monthly High	1.1176
Previous Monthly Low	1.0981
Daily Fibonacci 38.2%	1.1117
Daily Fibonacci 61.8%	1.1099
Daily Pivot Point S1	1.1091
Daily Pivot Point S2	1.1042
Daily Pivot Point S3	1.1014
Daily Pivot Point R1	1.1167
Daily Pivot Point R2	1.1195
Daily Pivot Point R3	1.1243

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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