EUR/USD Technical Analysis: Bullish breakout confirmed ahead of the ECB

• EUR/USD's daily chart is reporting a bullish setup. 
• The pair is on track to test key trendline resistance at 1.1153.
• The ECB President is expected to stress the need for fiscal stimulus. 

EUR/USD is reporting a bullish breakout ahead of the European Central Bank (ECB) rate decision. 

The pair closed above the Dec. 4 high of 1.1116 on Wednesday, confirming a bullish higher low and higher high setup on the daily chart. 

Wednesday's close has set the pair on the path to test the resistance of the trendline falling from September 2018 highs. At press time, the resistance is located at 1.1153. 

The Governing Council of the ECB is set to announce the rate decision and publish the policy statement at 12:45 GMT and 13:30 GMT, respectively. 

The central bank is likely to keep rates steady and back the minutes from the October meeting, which called for patience to let the new easing package take effect on the economy and the inflation outlook, according to the Research Department at BBVA. 

Moreover, the new President Christine Lagarde is likely to stress the need for more efforts on the fiscal front. 

That could bode well for the EUR, especially since the Federal Reserve on Wednesday sounded dovish by citing high inflation as the prerequisite for rate hikes. The short-term bullish setup would be invalidated if the pair finds acceptance below 1.1040 (Dec. 6 low), invalidating the higher lows setup. 

Daily chart

Trend: Bullish

Technical levels