EUR/USD consolidates gains above 1.1800 ahead of ECB

• EUR consolidates gains vs. USD, holding at daily highs.
• Key event ahead: ECB meeting.
• Data fails to support USD.

EUR/USD printed a fresh 3-day high at 1.1816. The pair remains above 1.1800, consolidating gains ahead of tomorrow’s ECB meeting. Despite losing ground against the euro, the US dollar is up versus commodity currencies.

EUR/USD up despite US yields and data 

The pair is up 50 pip today, supported by a decline of the US Dollar against the yen and European currencies. The Dollar Index (DXY) dropped to 93.43, the lowest since last Friday despite higher US yields. The 10-year yield reached 2.47% earlier today and then pulled back to 2.43%; it was still headed toward the highest close since March. 

The move in yields takes place amid expectations of another rate hike in December from the Federal Reserve and also on speculations about the next Chief. Fox News reports that President Trump is thinking about keeping Yellen as Chair. 

Earlier today, economic reports from the US didn’t help the greenback. EUR/USD broke above 1.1780 and then rose on top of 1.1800 after the releases of the US Durable Goods Orders and New Home Sales numbers. Both reports showed better-than-expected readings. 

US Durable Goods Orders: Continued firming in factory sector data - Wells Fargo

The key event ahead is tomorrow’s ECB meeting. No change in rates is expected but an announcement regarding the QE program is likely. The details on the program and the outlook are likely to be the main drivers of price action on Thursday. 

EUR/USD levels to watch

FXStreet’s technical confluence indicator notes an important support at 1.1795. Below that level, other short-term supports might be seen at 1.1775 (20-hour moving average) and 1.1750 (daily low). On the flip side, resistance levels could be seen at 1.1835 (Sep 29 high / Sep 14 low), 1.1855/60 (last week high) and 1.1880 (Oct 12 high).