EUR/USD – Fibo level playing a hardball ahead of ECB

EUR/USD is on the front foot Asia, but is once again having a tough time breaching confluence of Fibo level around 1.1260.

Pair clocked intraday highs around 1.1264 (50% of 1.1616-1.0911) in the previous two sessions but failed to close above the same. Moreover, the currency pair also failed to close above 1.1259 (23.6% of 1.0911-1.1366).

All eyes on ECB

European Central Bank (ECB) rate decision is due later today. Markets expect the bank to extend the maturity of its QE program from March 2017 to September 2017. EUR traders would be interested to hear Draghi comment on the political scene across the Eurozone – Spain is without government for almost eight months, Italy is heading towards referendum that could threaten EU membership, while Merkel faced defeat in regional elections.

Apart from the ECB event, the focus will be on the weekly US jobless claims release.

EUR/USD Technical Levels

Breach of confluence of Fibo noted around 1.1260 would expose psychological level of 1.30. Further gains could run into wall of resistance at 1.1366 (Aug 18 high). On the other hand, a breakdown of support at 1.1229 (previous day’s low) would shift risk in favor of a drop to 1.1209 (100-DMA + 5-DMA). A violation there could yield 1.1144 (Mar 24 low).