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Market Outlook on EURUSD - EURUSD consolidation continues as ECB meeting approaches
The EURUSD currency pair was seen slipping last week as the common currency briefly touched the $1.1606 level before reversing the losses rather quickly.
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The decline to 1.1606 level came about following the currency pair’s failure to break out above the resistance level of $1.1730.
The consolidation is expected to continue into this Thursday’s ECB meeting.
While the previous meeting was hawkish as the central bank announced its plan to end QE by December 2018, the bullish prospects were offset by weaker comments about interest rates.
The ECB had announced that despite an end to QE, interest rates were likely to remain at current levels until middle of next year.
From a tehnical stand point, any gains in the euro currency are expected only on a convincing breakout above 1.1730.
While the ECB’s meeting could offer some catalyst, the recent downtick in core inflation rate is expected to see officials remain cautious.
Furthermore, Friday’s hawkish expectations on the U.S. second quarter GDP is also expected to keep the euro’s gains in check.
In the near term, the currency pair is expected to remain trading within the range of 1.1730 and 1.1606 and the major support level at 1.1540.
A breakout from either of these levels could potentially signal the next direction in the trend.
