EUR/USD eyes break below 1.10 on pre-ECB positioning

EUR/USD pair dangerously close to breaching the psychological support of 1.10 as markets position for a dovish European Central Bank (ECB) policy statement.

ECB to lower threshold for bond purchases

The speculation is rife that the central bank would lower the threshold of bond purchases so that more bonds are available for purchases under the QE program, which the bank intends to run well into 2017.

Furthermore, analysts generally expect strong hints of more easing, but very little action from policy makers. Consequently, the common currency fell on Tuesday and is trading dangerously close to 1.10 levels in today’s Asian session. The bird has clocked a low of 1.1003 and is now trading around 1.1013 levels.

EUR/USD Technical Levels

Beach of psychological support at 1.10 would open doors for a drop to 1.0971 (June 27 low), under which losses could be extended to 1.0937 (61.8% of 1.0517-1.1616). On the other hand, a break above 1.1022 (daily high) could yield 1.1050 (5-DMA) above which 200-DMA level of 1.1086 could be put to test.