Eurusd Moves Ahead Of Ecb Meeting

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Eurusd Moves Ahead Of Ecb Meeting

Eur/Usd Moves To 1.0932 Ahead Of Ecb Meeting

The EUR/USD pair continued its bullish descent on Wednesday as no major catalyst could alter its movement. Recent data showed a slight improvement in the Eurozone's business activity. However, some analysts believe that data is not the reason for the bullish advance of EUR/USD.

So, what's propelling the EUR/USD higher? It all comes down to a bearish trend in the US bond yields. Furthermore, a significant option for the US T-bond yields expires in a few days.

Eur/Usd Registers +0.43% Gain

For now, EUR/USD can be seen trading close to the 1.09 handle with a gain of +0.43% for the trading session. The most apparent resistance can be seen near 1.0930, 1.0950, and the 1.10 handle.

On the data front, the EU's business activity remains in contraction despite some improvement. For starters, the PMI reading showed a trading 47.9, which is still -2.1 away from the 50 mid-point. Additionally, the PMI has been printing readings in the contraction phase for the 8th month, which is unsuitable for the EURO.

On the US side, the PMI reading showed a slight improvement, with a reading of 52.3 for the Composite PMI. According to experts, that's one of the best readings, which was only last seen in June last year.

Like that, the manufacturing PMI moved from a reading of 47.9 to around 50.4, a major surprise for the market players. Similar moves were seen in the services sector, from a reading of 51.4 to around 52.9.

The technical reading of EUR/USD shows it has formed a chart pattern called 'bearish engulfing'. However, the pattern appears no longer valid as a bullish advance has already crossed the 1.0922 handle, where 50 SMA is present.

close above the 1.0931 level will open the doors to the 1.0951, the highest point from 16th January. After that, the next target for the EUR/USD bulls will be 1.0999 - 1.10 area.

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