EUR/USD extends losses on a quiet session

EUR/USD continued to move with a bearish bias and reached a fresh low at 1.0697. Then it climbed back above 1.0700 and it was trading at 1.0710, down 50 pips for the day. 

Correction awaiting the ECB 

The euro is falling against the US dollar after rising sharply on Monday, when it climbed to 1.0795, the strongest level in almost three weeks. Today’s decline is a correction that follows three days of consecutive gains. 

 Price is still above the level it closed last week and also on top of the 20-day moving average that stands at 1.0690. 

On Thursday the European Central Bank will announce its decision on monetary policy. Most analyst expect an extension of the purchase program. “We expect the ECB to extend QE similar to consensus expectations by a further six months beyond March at the current monthly purchase pace of EUR80 billion. If the ECB delivers as we expect it is likely to prove neutral for the euro helping it to remain at current weak levels for longer”, said analysts from MUFG. 

ECB QE could include Greek bonds soon - BBH

EUR/USD technical levels 

To the upside, resistance level might be seen at 1.0745/50 (20-hour moving average), 1.0785 (daily high) and 1.0800. On the opposite direction, support could be located at 1.0685/90 (Dec 02 high), 1.0560 (Nov 28 & 29 high) and 1.0500/05 (Dec 05 low).