EUR/USD: The long-term picture is bullish, buyers to return on pullbacks

The EUR/USD pair soared to a fresh multi-year high of 1.2177 last week, a level that was last seen in April 2018. This week, the main event will be the European Central Bank monetary policy announcement on Thursday. Technically, the pair is technically bullish in the longer-run, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“The main event will be an ECB’s monetary policy meeting on Thursday. President Christine Lagarde has long ago anticipated more easing is coming to support the Union’s economy throughout the pandemic. Market players are pricing in an extension of TLTROs, and an increase in PEPP by up to 500billion euros. The ECB has expressed concerns about EUR/USD at 1.2000, and the current rally may well be a critical issue to discuss on Thursday.”

“Germany will publish the December ZEW survey on economic sentiment, expected to contract further, while the US will release the December Michigan Consumer Sentiment Index´s preliminary estimate. The EU will release the final reading of Q3 Gross Domestic Product, while the EU and the US will offer the last versions of their November inflation figures.”

“EUR/USD has an immediate support level at 1.2100, followed by the former year’s high at 1.2011. Below the 1.2000 figure, the pair could enter a more sustainable bearish corrective decline and extend it towards 1.1860. Above 1.2185, the pair could extend its gains up to 1.2300 in the upcoming days.”