EUR/USD: Focus on Draghi speech after biggest single-day rise since Sept. 20

• EUR/USD neutralized the immediate bearish view with a 0.89 percent rise on Friday.
• The dovish Fed expectations could keep the USD on the defensive ahead of the FOMC rate decision.  
• Draghi may repeat last week’s dovish message, capping gains in the EUR.  

The EUR/USD pair is currently trading at 1.1420, having hit a two-week high 101426 earlier today.  

The currency pair jumped 0.89 percent on Friday – the biggest single-day rise since Sept. 20 – neutralizing the bearish view put forward by the downside break of the trendline connecting the Nov. 13 and Dec. 14 low on Thursday.  

These gains were a result of broad-based USD weakness likely triggered by the Dow Jones Newswires report stating that the Fed is considering ending its balance sheet normalization program sooner-than-expected. Moreover, these reports seem to have reinforced investors’ expectations that the tightening cycle has ended.  

The EUR/USD pair, therefore, could remain better bid in the leading up to the FOMC rate decision, scheduled on Wednesday, although the upside could be limited, courtesy of dovish ECB expectations. The central bank downgraded its assessment by stating that the balance of risks has moved to the downside, triggering speculation that of a dovish change in the forward guidance wording at the next meeting, scheduled for 07 March.  

Moreover, ECB’s Draghi, during his speech later today at 14:00 GMT, could repeat last week’s dovish message, capping gains in the common currency.  

EUR/USD Technical Levels