The EUR/USD is bouncing back after falling sharply in the past few days. The EUR to USD price is trading at 1.2095, which is slightly above yesterday’s low of 1.2040.
What to expect: The focus among traders today will be on the European Central Bank (ECB) meeting that will kick-off tomorrow. The meeting comes at a time when the European economies are struggling as the number of coronavirus cases rise.
Also, the rollout of the EU recovery fund has been relatively slower than expected. Still, the ECB will not tweak its monetary policy, according to most estimates.
The EUR/USD will also react to the swearing-in of Joe Biden that will happen tomorrow. The new administration has pledged to build-back better, which is synonymous with large infrastructure spending and more stimulus.
EUR/USD technical outlook
Turning to the daily chart, we see that the pair has been in a downward trend recently. Notably, it has successfully moved below the 15-day and 25-day exponential moving averages. The two have actually made a bearish crossover. Further, the price is still in the Ichimoku cloud and there is a possibility that it will break-out below the cloud.
Therefore, today’s bounce seems like a dead cat bounce before the pair resumes the downward trend. However, a move above 1.2200 will invalidate this trend.
EURUSD technical chart