The dollar managed to cut a significant amount of its losses in late US trading yesterday, and despite yesterday's rebound, EUR/USD remains below 1.0900. The pair has been trading little changed today as all eyes are on the ECB's future policy decisions. Here's a complete look at the current pair:
EUR/USD daily chart
As you can see, the pullback over the past two weeks has been technical. This happened during a test of the 200-day moving average (blue line), which will continue to be an important line ahead of the ECB today. The current level is 1.0843.
Despite yesterday's rally, buyers were unable to sustain levels above the 1.0900 mark. This has since led to a drop below both the 100-hour moving average and his 200-hour moving average, which now puts him at 1.0883-90. As such, the short-term bias is shifting back in favor of sellers as we now adjust for European trading.
The main risk event for the euro today will be the ECB's policy decisions. The central bank is expected to maintain the status quo and keep interest rates unchanged, preaching its data-dependent mantra. ECB President Lagarde's press conference will likely be the center of attention. Changes in her words and tone, as well as rebounds in market prices, will be points of scrutiny for traders.
On the dollar side, things certainly haven't gotten any easier this week so far due to the push and pull in the bond market. For now, the 10-year Treasury yield remains above its 200-day moving average of 4.10%. This continues to give dollar bulls a reason to keep the dollar in a more resilient position this week.
