The EUR/USD currency pair rallied a bit against the US dollar Tuesday as we await the ECB announcement. At this point, I think the market is more likely than not going to have to pay close attention to any statement coming out of the central bank, as people are hoping that perhaps the Europeans are going to tight monetary policy. There is almost no chance of that being the longer-term trajectory, although it looks like they are going to do a token hike or two.
The 1.04 level above should offer quite a bit of resistance, as it is the bottom of the previous consolidation area, where we had seen so much in the way of support. After all, “market memory” could come into the picture, and we also have the 50-Day EMA sitting below the 1.05 level and dropping from here. It should continue to offer quite a bit of “dynamic resistance”, but at this point in time, it’s likely that we see a lot of noise regardless of what happens next.