EURUSD Trades Higher Ahead of the ECB Decision Tomorrow

EURUSD managed to rebound in early European session after yesterday’s sharp losses but the booounce stalled at 1.1366. Euro rallied against the USD after the emergency rate cut by Fed last week. Traders now await the ECB policy decision tomorrow and the measures will announce to combat the coronavirus outbreak impact. ECB President, Christine Lagarde said the ECB policy makers are looking at all tools and actions, and particularly ones to provide “super-cheap” funding and ensure liquidity in the markets and that credit don’t dry up.

German Chancellor, Angela Merkel said that we must have a coordinated European economic response to the coronavirus situation and the target is to maintain economic life. She added that countries should not isolate each other in Europe and without vaccination, 60-70% of the population will be at risk.

Analysts now expect the coronavirus outbreak to pull the Eurozone into a recession. Italy will be the main problem for the euro in the upcoming months as the coronavirus outbreak drove Italian government to lockdown the entire country, in an already fragile economy and banking system.

Earlier today the Bank of England cut the interest rates by 50 basis points to 0.25 in an emergency policy meeting.

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EURUSD Resistance and Support

EURUSD is 0.48% higher at 1.1333 as the pair rebounds from yesterday’s selloff in a correction move from the 14-month highs. The technical outlook is bullish for the pair, and an attempt to Monday highs can’t be ruled out.

On the upside, the first resistance for EURUSD stands at 1.1366 the daily top. A break above might challenge the next resistance level at 1.1456 the high from yesterday trading session. Monday’s top at 1.1496 is the next supply zone.

On the other hand, the initial support for the pair stands at 1.1275 the daily low. In case the pair breaks below the next support is at 1.1213 the low from March 6. Next support will be met at 1.1120 the low from March 5th.

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