EUR/USD reverses daily gains after US data, ECB presser underway

As the ECB presser gets underway, the EUR/USD pair ran through fresh offers at higher level and has now slipped into negative territory. 

Currently trading around 1.0610 region, testing session lows, upbeat US economic data weekly unemployment claims, Philly Fed manufacturing index and housing starts, all showing better-than-expected readings and attracted some fresh selling pressure around the major. 

However, expectations that the Governing Council’s economic assessment may be slightly more optimistic, in wake of a recent pick-up in inflation pressure, might extend some support to the pair and limit the pair's downslide near 1.0600 handle. 

It would, however, be prudent to wait for a hawkish signal, as the new forecasts would be available only in March, before confirming that the inflation trajectory has actually changed.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "From a technical point of view, the pair presents a neutral-to-bullish stance, with indicators holding within positive territory, but with no certain directional strength, and the price hovering around a bullish 20 SMA."

She further writes, "The key resistance is 1.0710, the 38.2% retracement of the latest monthly slide, with and advance beyond it favoring an extension towards 1.0750 first, followed later by 1.0800. Seems unlikely Draghi will disappoint, but if he does, 1.0620 is the level to watch, as below it, the pair can extend its decline down to 1.0565, the 23.6% retracement of the same slide."