EUR/USD Bulls Eyeing A Move Beyond Mid-1.1800s, Focus Shifts To ECB

On Wednesday, the EUR/USD pair snapped its eight consecutive days of losing streak in a spectacular fashion and surged back above the 1.1800 handle to over one-week highs. The move came after the Fed left its forecast for 2018 interest rate hikes and inflation outlook unchanged. Despite a seemingly hawkish FOMC statement, the US Dollar sold off across the board and added to its pre-Fed weakness, led by slowing core consumer price growth. 

The greenback selling interest now seems to have receded, at least for the time being, with market focus now shifts to the ECB monetary policy decision, due to be announced later during the European session. The upcoming meeting is more likely to be a non-event for the markets and hence, the focus would be solely on the post-meeting press-conference, where comments by the ECB President Mario Draghi could infuse some volatility around the EUR crosses.

The pair has now entered a consolidation phase just below mid-1.1800s, representing 50 percent Fibonacci retracement level of its latest leg of downside from 1.1961 to 1.1718. A follow-through buying interest now seems to pave the way for a move back above the 1.1900 handle toward 1.1925-30 supply zone. 

On the flip side, the 1.1810-1.1800 confluence region, comprising of 38.2 percent Fibonacci retracement level and 100-day SMA, now seems to act as immediate strong support, which if broken could open the door for a retest of 1.1740 horizontal support ahead of 3-week lows support near the 1.1715 level.