EUR/USD: Struggle with 1.1200 extends, ECB in focus

The offered tone surrounding the US dollar appears to weaken a bit ahead of the European open, keeping EUR/USD flat-lined around 1.12 handle.

EUR/USD falls sharply from above 100-DMA

Currently, EUR/USD trades modestly higher at 1.1199, reversing a spike to 1.1214 levels reached in early Asia. The recovery in the main currency pair from ahead of 1.11 handle lost legs near 1.1215 this Thursday, as the USD bulls recovered lost ground somewhat versus its major competitors. Meanwhile, the USD index now drops -0.09% versus a 0.21% slide seen earlier today.

Later today, the ECB policy decision is likely to shape the next direction in the major ahead of Friday’s US payrolls data. Markets are expecting ECB to keep the monetary policy unchanged, with the deposit rate steady at -0.40%. However, Draghi and company are expected to announce the first upward revision to the inflation forecasts since the asset purchasing began in January 2015. 

EUR/USD Technical Levels             

In terms of technicals, the pair finds the immediate resistance 1.1226/50 (20-DMA/ psychological levels). A break beyond the last, doors will open for a test of 1.1300/09 (round number/ 50-DMA) On the flip side, the immediate support is placed at 1.1159/54 (10 & 5-DMA) below which at 1.1099 (200-DMA) could be tested.