EUR/USD: Dovish ECB meeting to drag the pair below the 1.16 level – Scotiabank

EUR/USD is steady to marginally higher with the 1.16 zone acting as an anchor against broad losses in the dollar today. According to economists at Scotiabank, markets may be preparing for another dovish European Central Bank (ECB) meeting this week, which would leave the pair pointing to losses extending below the 1.16 mark.

Room for EUR gains is limited 

“Even a moderately less dovish statement will stand starkly in contrast to next week’s Fed decision, so room for EUR gains is limited and selling the currency on a post-ECB gain is the most sensible strategy.”

“EUR/USD is currently trading against ~1.1620 resistance to be followed by the mid 1.16s zone that stands as a clear area to breach that would signal a firmer rejection of downward pressure – resistance at 1.17 (50-day MA at 1.1702) follows.”

“Support is 1.1572 after the 1.16 area.”