EUR/USD buyers look to retain near-term control ahead of ECB decision, Draghi

Technical Analysis

Author: Justin Low | eurusd

Price currently leans on support from the 100-hour moving average

EUR/USD was trading steadily around 1.1380 levels before the headline here briefly brought it lower to 1.1367. But price is finding some support at the lows for the day as buyers are leaning on the 100-hour MA (red line) @ 1.1371 to keep up the near-term bullish bias in the pair.

There's also additional support from the 200-hour MA (blue line) @ 1.1364 for any secondary line of defense for buyers ahead of the ECB decision and Draghi's presser later. Price should remain contained around current levels as markets await the next move by the ECB.

The downgrade in both the growth and inflation forecasts are very much expected at this juncture but the important thing to look out for here is if those downgrades start to impact the central bank's assessment for rate hike conditions or their risks outlook.

As long as the ECB and Draghi maintain that they will keep rates on hold "through the summer of 2019" and that risk are still "broadly balanced", that will be enough to keep markets satisfied and prevent any strong decline in the euro later today.

As for EUR/USD, price action remains a bit of a dull one over the past two weeks with lows reaching just above 1.1300 and highs limited by the 1.1450 level but for the most part it's been ping pong between 1.1300 and 1.1400.

Traders will be hoping for the ECB to offer something new to break this range but given that their confident message later today as they end QE will be balanced out by the downward revisions to growth and inflation outlooks, the net reaction later on may very well be neutral and the current trading range could persist ahead of the FOMC meeting next week.

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