EUR/USD testing lows near 1.1530

The pick up in the demand for the greenback is forcing EUR/USD to grind lower to the area of 1.1530, or daily lows.

EUR/USD cautious ahead of ECB

After clinching fresh cycle tops around 1.1580 on Tuesday, the pair is now drifting lower to the 1.1530 area amidst some moderate rebound in the greenback and some cautious trade ahead of the ECB meeting tomorrow.

Tracked by the US Dollar Index, the buck seems to have found some support around 94.30, levels last seen in September 2016, after the sharp pullback following another failed attempt of the revised  ‘Trumpcare’ bill to pass among Republicans.

It should be all about the ECB in the next hours of trading, as market expectations of some announcement regarding the ongoing QE programme have been bolstering the pair’s rally in past weeks, particularly after the ECB Forum in Portugal late in June.

Nothing scheduled data wise in Euroland today, whereas building permits, housing starts and the EIA’s weekly report on US crude oil inventories are all expected across the pond.

EUR/USD levels to watch

At the moment, the pair is losing 0.18% at 1.1533 facing the immediate support at 1.1453 (10-day sma) followed by 1.1375 (21-day sma) and finally 1.1369 (low Jul.13). On the upside, a breakout of 1.1583 (high Jul.18) would target 1.1616 (2016 high May 3) en route to 1.1713 (monthly high Aug.24).

In addition, the daily RSI (14) is slightly below the overbought area today (currently at 67), while the MACD stays unchanged in the bullish territory. Spot is expected to keep the constructive tone while above the near-term support line, today at 1.1312.