EUR/USD sidelined around 1.2400 ahead of ECB

• The pair retreated from recent tops and now gyrates around the 1.24 handle.
• USD steady in the mid-89.00s, focus on Trump, protectionism.
• ECB meeting next of relevance for the pair today, some dovish tone expected.

The shared currency is alternating gains with losses vs. its American counterpart in the second half of the week and is now motivating EUR/USD to extend a consolidative stance around 1.2400 the figure.

EUR/USD now looks to ECB

The pair’s upside seems to have found a strong hurdle in the 1.2420/30 band so far this week, coincident with the short-term resistance line off YTD lows seen in January.

The resulting consolidation theme is putting EUR-bulls resolve to the test ahead of the key ECB meeting due later in the European afternoon. In this regard, consensus expects the central bank to refrain from making noticeable changes in its language, and in light of the lack of upside traction in inflation, a somewhat dovish message should not be ruled out.

On the US side, all eyes will be on the press conference by President Trump, where import tariffs will be on top of the agenda as well as probable exemptions for Mexico and Canada. The greenback, in the meantime, remains parked in the mid-89.00s when tracked by the US Dollar Index.

In the data space, German Factory Orders contracted 3.9% MoM in January while the usual weekly report on US labour market and Challenger Job Cuts are only due across the pond.

EUR/USD levels to watch

At the moment, the pair is losing 0.10% at 1.2398 and a break below 1.2334 (21-day sma) would target 1.2317 (10-day sma) en route to 1.2272 (low Mar.1). On the flip side, the immediate resistance aligns at 1.2445 (high Mar.7) seconded by 1.2537 (high Jan.25) and then 1.2557 (2018 high Feb.18).