EUR/USD: Upside capped by 1.1950 as focus shifts to ECB

The EUR/USD pair faced rejection near 1.1950 barrier and drifted slightly lower, as the bulls consolidate the rally to fresh weekly tops, with attention now turning towards the much-awaited ECB policy decision.

EUR/USD well supported above daily pivot at 1.1911           

The retreat in the spot from one-week highs is largely on the back of a solid rebound staged by the US dollar versus its major peers from a downward spike to 92.06 levels, 3-day troughs.

Despite the latest down move, the EUR/USD pair remains well bid amid increased expectations that the ECB will announce the QE tapering plans at its policy meeting due tomorrow, shrugging-off the latest headlines that the ECB may be ready to unwind the QE programme until December.

Meanwhile, markets appeared to have ignored downbeat German factory orders data, as the sentiment around the US dollar and global equities continue to serve as a positive input for the pair heading into the US ISM services and Fed’s Beige book release.

EUR/USD Technical Set-up  

Valeria Bednarik, Chief Analyst at FXStreet, explained: “There's an immediate intraday resistance at 1.1960, with an upward acceleration through the level opening doors for an extension up to 1.2000. Further gains seem unlikely amid traders turning cautious ahead of Draghi. The pair has been finding buyers around 1.1880/90 during the past few sessions, with a stronger intraday support at 1.1860. Below it, 1.1822, last week low, is the next bearish target and support.”