Key levels in focus for EUR/USD ahead of today's ECB meeting

The pair holds above key support levels for the time being

The euro will be the big talking point today as we get into the thick of things later in the day with the ECB monetary policy meeting coming up. Eamonn and Adam both posted up previews on the meeting here and here respectively.

In terms of technicals, what are the key levels to look out for in the pair ahead and during the meeting?

The key level remains the 1 March (not February) low @ 1.2155. At the moment, the pair is finding bids between that level and the 18 January low of 1.2165. This region is a key support region for EUR/USD so far this year as it provides the floor for the range we have seen since January.

The other notable level to look out for is the 1.2200 level - where we have large option expiries at the figure level - but the expiries will only take place after the ECB meeting and Draghi's presser.

That leaves the ECB decision and Draghi's presser as the major drivers of direction for the euro. The latter being the market-sensitive one surely.

EUR/USD has been particularly vulnerable in the last few days, owing much to the strength in the dollar but today will be one where the euro will have a say.

Will Draghi talk down the strength in the euro? Will Draghi shrug off weaker-than-expected economic data? Will Draghi talk up inflationary pressures? Or will he keep mum on guidance and leave things as they were in the last meeting?

It's tough to see Draghi be too dovish since the governing council has been talking up the inflation outlook and is looking to exit QE by September in order to guide the market towards the possibility of normalising monetary policy next year.

But then again, there is still plenty of time between now and June's meeting in which they can still hint at changes to guidance.

While a downside break of 1.2155 opens up a move to 1.2000, if the ECB is to be extremely hawkish that will surely spur bulls to reload on longs and should that be the case, the sky's the limit (or at least closer towards 1.2500) for the pair in the coming week.