EUR/USD testing weekly highs near 1.1280 ahead of ECB, FOMC

Following Tuesday’s small pullback, EUR/USD has now resumed the upside and is now flirting with weekly highs in the 1.1280 region.

EUR/USD bid ahead of ECB, EU Summit

The pair is navigating the area of multi-day highs in the 1.1280 area following the persistent downside pressure in the greenback, which is once again challenging the key support at 97.00 the figure when tracked by the US Dollar Index (DXY).

Regarding the ECB event, the central bank is expected to keep the monetary status quo unchanged later today. However, investors will closely follow Draghi’s press conference with the main focus staying on the recently announced TLTRO-III and the probable implementation of a tiered deposit rate system.

Later in the NA session, US inflation figures gauged by the CPI will be in the limelight ahead of the publication of the FOMC minutes.

What to look for around EUR

EUR remains under pressure following poor fundamentals in Euroland and the strong up move in the greenback in past weeks. In fact, recent disappointing readings in the region somehow confirm that the slowdown in the bloc and the ‘patient-for-longer’ stance from the ECB could be among us for longer than expected. Against the backdrop of souring risk-appetite trend, the greenback should emerge stronger and is expected to keep weighing on spot for the time being. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist option among voters.

EUR/USD levels to watch

At the moment, the pair is gaining 0.14% at 1.1276 and a breakout of 1.1284 (high Apr.9) would target 1.1318 (55-day SMA) en route to 1.1337 (200-week SMA). On the downside, immediate support emerges at 1.1230 (10-day SMA) seconded by 1.1183 (low Apr.2) and finally 1.1176 (low Mar.7).