EUR/USD ahead of the ECB
EUR/USD is consolidating in a sort of triangle on H1 ahead of the ECB meeting and press conference later today (11:45 and 12:30 GMT). Germany released an upbeat factory orders report. The spread between US and German bond yields is also narrowing eases pressure on EUR/USD slightly. At the same time, most European stocks declined as investors awaited the ECB’s decision.
Bears are waiting for ECB policy meeting and ADP for further trend confirmation. The less dovish statement by ECB in policy meeting probably won’t have a prolonged impact on EUR’s downtrend, and Draghi will probably do his best to sound dovish. To do that the ECB could provide new details on ABS purchases (QE) or reduce GDP and inflation forecasts. This might be enough to cause the single currency’s selloff. Positive ADP employment data will affect EUR/USD making it move down.
Most analysts allow a short squeeze in EUR/USD targeting $1.3220 and $1.3345, but remain the long-term bearish. Main support is at $1.3100.
Chart. H1 EUR/USD