EUR/USD steady above 1.1510 ahead of ECB

The correction of EUR/USD from 1-year highs found support around the 1.1510 area. The pair is steady, hovering around 1.1520, on a quiet session, ahead of Thursday ECB meeting. 

EUR/USD down after 3-day rally

Yesterday the euro posted the highest daily close since September 2015 against the US dollar. It peaked at 1.1583 before starting to correct lower. Today at beginning of the US session bottomed at 1.1508. 

Despite the 80-pip correction, the uptrend remains intact. For the next hours, the bias favors the downside as long as price remains below 1.1530. Until Thursday Asian session, volatility should remain low. 

On European hours the ECB will announce its decision on monetary policy (11:45 GMT). No change is expected. Draghi will hold a press conference (12:30 GMT). Traders will look for clues about the future of the QE program. Volatility could rise sharply across euro’s crosses. 

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Technical outlook 

“Technical readings in the daily chart favor an upward extension as the 20 DMA has accelerated its advance below the current level but above the 100 and 200 DMAs, which also present bullish slopes”, said Valeria Bednarik, Chief Analyst at FXStreet. 

According to her momentum indicator in the daily hart has partially lost its bullish strength, but remains well above its mid-line, while the RSI indicator barely retreated from overbought readings, rather reflecting the latest pullback than indicating a bearish extension ahead.

“The key support stands at 1.1460, and as long as above it, the pair has scope to extend its advance up to 1.1615 first,  May 2016 monthly high, followed later by  August 2015 high”, added Bednarik. 

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