The Euro is trading higher on Thursday ahead of the release of the European Central Bank (ECB) interest rate and monetary policy decisions. Central bank policymakers are expected to leave interest rate unchanged at 0.00%, while unveiling fresh stimulus measures.
ECB officials have made it clear in recent weeks that a bigger Pandemic Emergency Purchase Programme (PEPP) and more subsidized long-term loans for banks will form the backbone of policy measures.
At 11:17 GMT, the EUR/USD is trading 1.2096, up 0.0014 or +0.11%.
Economists polled by Reuters expect the 1.35 trillion Euro PEPP to be expanded by at least 500 Billion Euros and its duration extended by six months to the end of 2022, with risks skewed towards a bigger and longer extension.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through 1.2178 will signal a resumption of the uptrend. The main trend changes to down on a move through 1.1800.
The minor range is 1.2178 to 1.2059. Its 50% level at 1.2119 is potential resistance. It’s also a potential trigger point for a surge to the upside.
The short-term range is 1.1800 to 1.2178. Its retracement zone at 1.1989 to 1.1944 is the first downside target. Since the main trend is up, buyers could come in on a test of this area.
The main range is 1.1603 to 1.2178. Its retracement zone at 1.1890 to 1.1823 is a value area.
Daily Swing Chart Technical Forecast
The direction of the EUR/USD is likely to be determined by trader reaction to 1.2119.
A sustained move over 1.2119 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into 1.2178. Taking out this main top could trigger an acceleration to the upside.
A sustained move under 1.2119 will signal the presence of sellers. Taking out 1.2059 will indicate the selling is getting stronger. This could trigger a further break into the short-term retracement zone at 1.1989 to 1.1944. Watch for buyers on the first test of this area. If it fails then look for the selling to possibly extend into 1.1890 to 1.1823.
Be prepared for an attempt by ECB policymakers to talk the Euro lower.
For a look at all of today’s economic events, check out our economic calendar.