EUR/USD finds support just ahead of July lows, ECB in focus

The EUR/USD pair found fresh buyers near July lows of 1.0950 and quickly rebounded higher towards 5-DMA, as the USD selling paused ahead of the ECB policy decision.

EUR/USD supported at daily S1

Currently, EUR/USD trades almost unchanged at 1.0977, bouncing-off fresh three-month lows struck at 1.0953 some minutes ago. The main currency pair attempts a tepid bounce, although looks vulnerable heading into the ECB interest rate decision.

Further, markets resort to repositioning their positions ahead of the highly influential ECB event, although markets expect the ECB to leave its monetary policy settings unchanged, but Draghi may provide fresh hints on the ECB asset purchases program.

Analysts at Danske bank note, “In our view, President Mario Draghi is very likely to be asked questions about the latest debate on QE tapering but we expect him to repeat that the ECB's focus is on full implementation of QE purchases.”

“Any comments about the committee's work on changing the ECB's self-imposed QE restrictions will also be followed closely but we do not expect any announcement before a decision on whether or not to extend QE purchases beyond March next year.”

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.1029 (Oct 18 high). A break beyond the last, doors will open for a test of 1.1050 (psychological levels) and from there to 1.1072 (Oct 12 high). On the flip side, the immediate support is placed at 1.0964 (daily low/ Oct 17 low) below which 1.0950 (multi-month lows) and 1.0900 (round figure) could be tested.