Three-day pullback from six-week high (1.1909) found footstep at 1.1815/10 zone (Fibo 38.2% of 1.1664/1.1909 upleg/55DMA) and edges higher in European session on Thursday, lifted by better than expected German data.
Wednesday’s close below daily cloud was negative signal, as falling thick cloud weighs and cloud base offers immediate resistance at 1.1830.
Traders focus the key event – ECB policy meeting, awaiting signal that the central bank is on track to start normalizing monetary policy as the life turns to normal after the pandemic.
Faster than expected rise in consumer prices and falling unemployment pressure policymakers to start exiting ultra-loose policy, but also to signal that ample support to the economy will remain for years to come, in other words – to signal that this is not the start of a gradual exit from easy policy.
The ECB is likely to cut bond buying from around 80 billion euros to the range of 60-70 billion, but will keep its discretion over the size of purchase under the 1.85 trillion euro Pandemic Emergency Purchase Program (PEPP).
Res: 1.1830, 1.1846, 1.1894, 1.1944.
Sup: 1.1810, 1.1800, 1.1786, 1.1757.
