The EURUSD pair depicted a white daily candlestick pattern for the first time in a week on Wednesday, July 21. The price action got under way at 1.1780. In the absence of significant macro drivers, the single currency dropped during the first half of the session to 1.1752, retracing to its April 5 low. After bouncing off that level, the pair rallied to 1.1804 and closed the day near 1.1794.
This morning, the pair spent most of the Asian session meandering within a narrow sideways trend. This was followed by a decline to 1.1779 and a return to 1.1795. The market now awaits the ECB’s rate decision. Needless to say, rates will not be hiked or lowered, as all eyes are on the central bank’s press conference and monetary policy statement, where new guidelines for the timeframe of QE tapering could be on the table.
If the ECB meeting does not produce any major surprises, we can expect the pair to test the upper bound of the current descending channel, after which another leg down with a target of 1.1704 looks likely.