The Euro maintains firm tone on Thursday ahead of ECB. Near-term price action is holding in the middle of thick daily cloud and constructive above 10/20SMA’s which were taken out on Wednesday’s strong rally. Long bullish candle of the previous day underpins for further upside as fresh bullish acceleration today approached 55SMA target at 1.1841. Daily techs are gaining bullish momentum for fresh extension towards barriers at 1.1858 (19/20 Oct double-top) and 1.1879 (12 Oct high). Supports at 1.1794 (broken 10SMA) and 1.1783 (broken 20SMA) should keep the downside protected. ECB is widely expected to keep interest rates unchanged on today’s meeting, with markets focusing on central bank’s plan for tapering its asset purchase program. Traders are looking for more details to be announced on ECB President Mario Draghi press conference (12:30 GMT). Markets expect the ECB to trim its monthly asset purchase from current 60 billion Euros per month to 40 billion, with question whether the program would last six or nine months after it starts. Market observers speculate about two scenarios for extension of the plan. The first one sees extension six for months with amount of 40 billion Euros and the second one expects extension for nine months with monthly amount of 30 billion Euros. ECB’s final decision is expected to be strong market driver. More hawkish approach is expected to further inflate the single currency which is already boosted by weaker dollar, for acceleration towards upper breakpoint, provided by daily Ichimoku cloud top at 1.1921. Softer tone from the European Central Bank would put the single currency under pressure, with loss of key handles (10/20SMA’s) expected to shift near-term focus lower.
Res: 1.1841, 1.1858, 1.1879, 1.1921
Sup: 1.1809, 1.1794, 1.1783, 1.1752
