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EURUSD: bulls looking jittery ahead of ECB meeting

The EURUSD pair ticked down 0.02% to 1.2034 on Tuesday, April 20. The US dollar rose moderately against major currencies on the heels of a corrective downswing. The economic calendar was a blank slate, so the decline in the key pair was attributable to a correction. Moreover, main USD pairs retreated as UST yields narrowed, while conversely, this factor earlier provided strong support to these currencies.

Todays macro agenda (GMT+3)

  • 12:00 UK: CPI, retail prices, PPI, and wholesale prices (March)
  • 13:30 UK: BoE Andrew Bailey speech
  • 15:30 Canada: CPI (March)
  • 17:00 Canada: interest rate decision
  • 17:30 US: EIA weekly petroleum status report
  • 18:00 Canada: BoC press conference
1

Current outlook

At the time of writing, the euro was trading at 1.2025. The 45-degree angle passes through the 1.2017 level. The price action has corrected to the LB of the balance line (55-day SMA), which passes through 1.2033.

On the hourly timeframe, the EURUSD looks ripe for recovery, as technical indicators show.  As for today’s macro news flow, we highlight the speech of BoE Governor Bailey, as well as the BoC’s meeting. The question now is whether buyers will be able to take advantage of technical factors.

The euro is drawing support from an announcement that the EU EU exercised an option to order an additional 100 mln doses of the BioNTech/Pfizer vaccine. The single currency needs vaccination news as it has been hit hard by lockdowns. An upturn in vaccine rollouts will speed up the pace of recovery in Europe.

If the price action rises above 1.2045, the recovery is expected to continue to 1.2068. However, should the dollar extend gains across the board today, the EURUSD pair will not be able to sidestep a slide to the 1.1995 trendline. The euro bulls are visibly nervous ahead of tomorrow’s ECB meeting.

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