1.21 Key Support for the EUR/USD Pair Ahead of the ECB
The EUR/USD pair trades without direction as it waits the ECB decision scheduled for Thursday. Bears attempted to push the pair below 1.21 twice this week, every time at the start of the London session. So far, they failed, but the pressure mounts for the level to give way.
Brexit as well as the Recovery Fund are an issue as well. The ongoing negotiations between the United Kingdom and the European Union enter final stage and the Euro pairs are likely to react. Hungary and Poland’s veto of the Recovery Fund represents another reason to worry about the Euro as we head into the end of the trading year.
Besides the two events, it all comes down to the ECB’s decision on Thursday. Should the central bank surprise with a more dovish statement, the EUR/USD exchange rate has a lot of room to correct.
EUR/USD Technical Analysis
From a technical perspective, the market bounced as it reached the rising trendline of a possible contracting triangle. This triangle could act both as a continuation and a reversal pattern. Therefore, both bulls and bears have something to trade.
Bears may want to wait for the price to break 1.21 and close below for the break to be valid. For shorting the pair, a stop is needed at 1.2175, targeting a move to 1.20 and below.