The ECB is expected to keep interest rates unchanged at 0.00%. However, the major focus will remain on the tapering decision. The EUR/USD is consolidating above the 1.1799 level as investors wait for the ECB monetary policy decision today. Forex trading market participants may look for a buy trade above 1.1799 with an initial target of $1.1856 and $1.1880 levels. The EUR/USD closed at $1.1813 after posting a high of $1.1852 and a low of $1.1802. The EUR/USD currency pair dropped for the third consecutive session on Wednesday amid the rising strength of the US dollar. On the other hand, the EUR/USD is facing a headwind ahead of the ECB’s Monetary Policy today. Get FREE Forex Signals Now! If you are interested in trading EUR/USD with forex robots, check out our guide. The stronger dollar continues to weigh on EUR/USD. The US Dollar Index surged to 92.86 on Wednesday. That’s after, the New York Federal Reserve Bank President gave hints about tapering economic support. He said that rather than focusing on monthly changes in job growth, he kept an eye on cumulative job figures. Furthermore, he stated that the central bank might start tapering by the end of the month. Even if the jobs figure does not show substantial progress for the month. A Quick Economic Data Review On the data front, the French Final Private Payrolls for the quarter surged to 1.4% against the projected 1.2%. It bolstered the single currency euro, limiting further losses in the EUR/USD. The French Trade Balance showed a deficit of -7.0B against the forecasted -6.2B and weighed on the Euro from July. Thus, it added a further loss to the EUR/USD. At 13:00 GMT, the Italian retail sales for July also declined to -0.4% against the predicted 0.3%. It weighed on the single currency Euro and added to the further loss in EUR/USD. The JOLTS job openings in July increased to 10.93M versus the expected 10.03M, supporting the US dollar. Moreover, the IBD/TIPP Economic Optimism Index for September fell to 48.5 from 55.3 expected, weighing on the US dollar and limiting the decline in the EUR/USD pair. The single currency Euro was experiencing pressure on Wednesday, a day ahead of the monetary policy meeting of the European Central Bank. Investors were expecting that purchases under PEPP could drop as low as 60 billion euros a month from the current 80 billion. These expectations have kept the Euro somewhat supportive, while losses in the currency pair EUR/USD have been limited. Market risk sentiment was also deteriorated by rising concerns that the increased spread of the coronavirus might slow the economic recovery. These concerns kept the riskier currency pairs under pressure for the day, and the EUR/USD pair also faced some downward momentum because of risk-off market sentiment on Wednesday. ECB’s Monetary Policy and Interest Rate Market players will keep a close eye on the European Central Bank today as it meets in Frankfurt to debate its post-pandemic stimulus amid rising inflation and strong economic growth. The market sentiment prevails that the ECB believes it is past time for the bank to remove its monetary stimulus. That’s because the global supply chain issues drive up costs for a wide range of goods. However, there is still much ambiguity about the coronavirus pandemic. ECB to keep Main Refinancing Rate Unchanged The ECB is expected to keep interest rates unchanged at 0.00%. However, the major focus will remain on the tapering decision. In the aftermath of the coronavirus in March 2020, the institution led by Christine Lagarde created a fresh asset purchase program to strengthen the eurozone. With a total envelope of 1.85 trillion euros ($2.19 trillion), the PEPP is set to expire in March 2022. According to Schmieding, the ECB now buys 80 billion euros worth of bonds per month under the program, which will likely be lowered to 70 billion euros after the Governing Council meeting on Thursday. ECB to Kick-off its Tapering Debate Despite the epidemic, the ECB has maintained its asset purchase program, known as APP, which currently has a monthly pace of 20 billion euros. In conjunction with PEPP, this initiative has been used by the central bank to keep the 19-member economy afloat. The ECB is starting the fourth quarter with a more significant underlying rate of bond purchases than in the third quarter of last year, according to a route set out by Philip Lane, ECB board member for economics. PEPP volumes, which were already greater in July than in July 2020, fell by just 26% month over month in August, compared to 30% in August 2020, albeit this could be due to market forces rather than deliberate strategy. Another five council members are thought to be leaning in that direction, in addition to the half-dozen members who are skeptical of the ECB’s accommodative policies. This isn’t enough to get a majority decision, but it’s enough to make Lagarde a nuisance. The individualistic nature of ECB council members’ decision-making and their ties to their respective countries’ economies have been the subject of increasing academic scrutiny. Lastly, the most difficult challenge may be achieving unity among the ECB’s ranks on the APP (asset purchase program). By next year, when the PEPP expires, choices on the size and flexibility of the APP must be made. EUR/USD 4-Hour Timeframe EUR/USD Price Forecast – Daily Technical Levels Support Resistance 1.1792 1.1842 1.1772 1.1872 1.1742 1.1893 Pivot Point: 1.1822 EUR/USD Price Forecast – ECB’s Monetary Policy in focus The EUR/USD is consolidating above the 1.1799 level as investors wait for the ECB’s monetary policy decision today. In the 4-hours timeframe, the EUR/USD currency pair is trading with a neutral bias at the 1.1817 level. The double bottom provides immediate support at the 1.1799 level. The closing of candles above this level suggests the chances of a bullish bounce off above the 1.1799 level. Thus, it can lead the market towards the next resistance level of 1.1856. In case of a bearish breakout below the 1.1799 level, the chances of a bearish trend remain high until 1.1750 today. On the 4-hours timeframe, the 50-day exponential moving average is likely to provide resistance at 1.1850. Thus, the currency pair suggests a strong bearish bias. On the other hand, the leading technical indicator, stochastic RSI, is holding in a sell zone. It’s demonstrating a selling trend in the EUR/USD currency pair. Therefore, Forex trading market participants may look for a buy trade above 1.1799 with an initial target of $1.1856 and $1.1880 levels. Alternatively, sell trades can be taken below the $1.1785 level to target $ 1.1750. All the best! Looking to trade forex now? Invest at eToro! Trade Forex Now! 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Ali B. Ali B. Live webinar speaker and derivatives (Forex, Crypto, and Indices) analyst with a broad range of skills for evaluating financial data, investment trends, technical analysis, fundamental analysis, and the best ways to strategies investment selection. Expertise: Trading Psychology; Speculative Positioning & Market Sentiment; Technical & Fundamental Analysis. View All Post By Ali B. Daily LookEUR/USD Daily share Read Next Litecoin Price Trades Above $180 (Up 3%) As Ukraine Legalises Cryptos Nancy Lubale 4 months The ECB is expected to keep interest rates unchanged at 0.00%. However, the major focus will remain on the tapering decision. The EUR/USD is consolidating above the 1.1799 level as investors wait for the ECB monetary policy decision today. Forex trading market participants may look for a buy trade above 1.1799 with an initial target of $1.1856 and $1.1880 levels. The EUR/USD closed at $1.1813 after posting a high of $1.1852 and a low of $1.1802. The EUR/USD currency pair dropped for the third consecutive session on Wednesday amid the rising strength of the US dollar. 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