EUR/USD price action is trapped in between its key hourly moving averages
The pair is sitting a little higher on the day, trading around 1.1820-30 levels in European morning trade so far but the technical bias isn’t hinting at much for now.
The bounce from yesterday comes after the pair met daily support from the 21 August low @ 1.1754 (as seen below) with the dollar also weakening slightly.
The recovery yesterday tested the 100-hour MA (red line) but failed to firmly break it before buyers found more conviction to do so earlier today.
Since then, price action has been hovering in between the key hourly moving averages, range now seen between 1.1811-51. So, that remains the key lines in the sand as we turn our attention towards the ECB later in the session.
The ECB and Lagarde are expected to address the rising euro currency a little and depending on their take on the situation, it will likely to some euro reaction.
A more dovish take i.e. correlating waning inflation to the rising currency and talking up the impact of a stronger currency on bringing down price pressures could lend itself to a weaker euro, should Lagarde put emphasis on getting inflation back on track.
But the flip side of that, is well pretty much the opposite reaction I guess.
So, it remains to be seen how fine a line will Lagarde walk later in the day.
As for the euro reaction, the technical levels will do well to provide some confirmation bias towards the key risk event later.
A break above the 200-hour MA (blue line) will see buyers seize near-term control with further resistance then seen closer towards 1.1882 and then 1.1900.
Meanwhile, a push to the downside sees support from the 100-hour MA before the 1.1800 handle comes back into play and then the lows before that closer to 1.1780, with yesterday’s low @ 1.1753 also an added layer of defense.