EUR/USD heading towards 1.1850 ahead of ECB verdict

• Supported by weaker Treasury yields and US dollar.
• All eyes on ECB QE program taper announcement.
• Sell the rallies post-ECB outcome?

After a brief phase of upside consolidation seen over the last hours, the EUR/USD pair is now breaking into fresh highs above 1.1830, in a bid to regain 50-DMA located at 1.1852 levels ahead of the highly anticipated ECB policy decision due later today.

Maintain an EUR bullish bias post-ECB - Nomura

The spot is on a steady rise from 1.1800 levels since the Asian trades this Thursday, tracking the USD price-action closely, as the greenback dips further into losses against its major peers amid tumbling US rates and renewed uncertainty over the next Fed Chair, after Politico reported that Trump is not ready to announce the next Fed Chair this week.

On the other hand, the EUR/USD pair continues to remain underpinned by the bullish sentiment around the Euro, as markets widely expect the ECB to announce a reduction in its bond-buying program by EUR 25/30 billion per month from its current EUR 60 billion monthly purchases.

The ECB QE taper announcement is likely to overshadow any developments surrounding the Spanish political environment. La Vanguardia, a Spanish daily, reported earlier this week that the Senate is expected to let Catalonia’s President Puigdemont speak on Thursday.

Ahead of the ECB event, the pair will take cues from the German Gfk consumer climate and Spanish employment data for fresh momentum.

EUR/USD Technical View

Haresh Menghani, Analyst at FXStreet, explains: “Technically, the pair is placed near a short-term descending trend-line hurdle, which is closely followed by another key resistance at 50-day SMA, currently near mid-1.1800s. A decisive break through the mentioned barriers would invalidate a descending triangular formation and would eventually pave way for extension of the pair's up-move towards reclaiming the 1.1900 handle en-route the next major resistance near the 1.1940-50 region. Alternatively, a rejection slide from the current resistance area is likely to find immediate support near the 1.1765-60 region.”