EUR/USD has been in a tight range since the beginning of this week, eying European Central Bank (ECB) monetary policy meeting and announcements thereof, policymakers are expected to announce some surprise decisions after a recent dip in Eurozone inflation.
The pair is being traded around 1.3524 at 09:38 GMT in London. Immediate support can be seen at 1.3477, low of this week, ahead of 1.3436, 76.4% fib level and 200 Daily Moving Average (DMA). A break and daily close below 1.3436 may open doors for 1.3300-3000 zone.
On upside, resistance can be noted near 1.3592 which is 50% fib level ahead of 1.3616, 100 DMA and then 1.3663 that is a confluence of 38% fib level and 55 DMA.
Today is a big day for Euro as ECB is scheduled to announce its decision about benchmark interest rate. A press conference and statement is also due anytime near the opening of the US session. Keeping in view the recent dip in inflation, many analysts believe that a surprise might come from ECB side. It could be in the form of negative deposit rate, Quantitative Easing (QE) or even another cut in interest rate. ECB surprisingly reduced the benchmark interest rate in November to a record low level of 0.25%.
During a last few public talks, Mario Draghi was seen discussing the possibility of some new monetary policy instruments that ECB might adopt to cope with falling inflation, so it is very likely that we may see an asset purchase program to inject additional money into the financial system, very similar to that of Britain or the US. Alternatively, a cut in deposit rate below its current level (which is zero) can also be an option for policy makers. Later on tomorrow, US jobless rate and non-farm payrolls reports are scheduled for release.