EUR/USD near 1.3380, ECB eyed

By FXstreet.com | August 07, 2014 AAA

FXStreet (Edinburgh) - The single currency is prolonging its bounce off session lows near 1.3360, now pushing the EUR/USD to the vicinity of 1.3380.

EUR/USD focus on the ECB

After briefly surpassing the 1.3390 level overnight, spot sparked a correction lower ahead of the (not so critical this time) ECB meeting today. Data wise, results from the German and Spanish industrial sectors and the French trade balance figures were largely bypassed by the markets ahead of the more relevant ECB event. “Although today’s ECB meeting has been proclaimed as the highlight in this week’s calendar, we expect it to have a limited impact on the EUR. Draghi should continue to have a dovish stance, especially since inflation declined to a new cycle-low and since the latest activity data also came out weak. For that reason we see risks slightly tilted to the downside for EUR/USD in connection with today’s ECB meeting”, observed Kasper Kirkegaard, Chief Analyst at Danske Bank.

EUR/USD key levels

The pair is now losing 0.03% at 1.3377 with the next support at 1.3333 (low Aug.6) followed by 1.3318 (low Nov.8 2013) and finally 1.3317 (weekly cloud base). On the upside, a break above 1.3425 (high Aug.5) would aim for 1.3433 (high Aug.4) and then 1.3445 (high Aug.1).

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