EUR/USD Edges Higher Ahead Of Thursday’s ECB Meeting

EUR/USD traded slightly higher in European trading on Wednesday with volatility generally slowing across most of the majors.

US non-manufacturing PMI figures released by the ISM fell short of expectations with a print of 55.3 for August versus an expected 55.8 although the data did not have a sustained impact on the exchange rate.

The ECB is scheduled to meet on Thursday which will drive volatility to the currency pair. The Bank will announce its rate decision at 07:45 EST and hold a press conference at 08:30 EST.

Fed member Dudley is expected to speak on Thursday which may also trigger a dollar reaction as earlier speeches from Brainard and Kashkari have hinted that the central bank may not act again this year. However, as both members are known doves, Dudley speech will provide a better idea as to the consensus among the FOMC.

Although EUR/USD has made a small gain in the week thus far, the pair remains confined within a range that was formed late last week. A break stands to carry follow through, emphasizing resistance from Friday’s spike high at 1.1979. A horizontal level is seen slightly ahead of the spike high at 1.1967 offering an additional upside hurdle.

Downside support in the pair at 1.1861 marks last week’s close. The level falls near a rising trendline that originates from the July 5th low. Further support at 1.1824 was prior resistance that held the pair lower on several attempts last month prior to an eventual break. The level also held the exchange rate higher last week.

EUR/USD 1-Hour Chart

EURUSD 1H Sept 6

Jignesh is an analyst and trader, specializing in currencies and commodities. He utilizes a macro view as well as a proprietary method of pattern recognition that is based on the principles of Elliott wave. His focus is to assess strength in trends, and perceiving high potential turning points in the markets. He brings over 4 years of experience in his current role.