EUR/USD edges higher but upside remains limited

EUR/USD managed to crawl higher during the New York session and reached fresh daily highs, although the pair lost momentum ahead of weekly peaks.

EUR/USD reached a high of 1.0767 but momentum was lacking, in line with broad market’s mood, as investors refrain from taking big positions ahead of the ECB decision tomorrow and, more important, Fed’s verdict next week.

At time of writing, EUR/USD is trading at the 1.0750 zone, recording a 0.32% gain on Wednesday, having recovered from its 2016 low scored at 1.0504 at the weekly opening.

Looking into the ECB meeting, expectations of a QE extension beyond March 2017 have been growing among investors. “Bottom line, QE will be extended, and for how long and for how much will determinate EUR's trend,” said Valeria Bednarik, chief analyst at FXStreet. “Less than six months with a reduced amount of monthly purchases will be EUR bullish, while for longer, and for more than €80 billion per month, will end up pushing it back lower.”

EUR/USD levels to watch

In terms of technical levels, next resistances are seen at 1.0796 (Dec 5 high), 1.0839 (Nov 14 high) and 1.0895 (50-day SMA). On the flip side, supports are seen at 1.0685 (21-day SMA), 1.0655 (10-day SMA) and 1.0584 (Dec 4 low).

To learn more about this topic, check our video analysis:

EURUSD from Tip TV Productions on Vimeo.