The Euro (EUR) has drifted a little lower over the session so far but losses are marginal ahead of the ECB policy decision, Scotiabank’s chief FX strategist Shaun Osborne notes.

Lagarde to maintain a ‘data dependent’ approach

“There is all but zero chance of the ECB cutting interest rates today. Swaps are pricing in steady policy and comments from top officials have suggested rate cuts will come through at a measured pace. President Lagarde seems likely to maintain a ‘data dependent’ approach to the policy outlook which may sound a little hawkish amid still relatively elevated service sector inflation pressures.”

“Spot has edged a little lower from yesterday’s peak near 1.0950 but the minor decline is measured and may be taking the form of a small bull flag ahead of renewed gains (above 1.0935/40 this morning).”

“Intraday, daily and weekly trend strength oscillators are aligned bullishly for the EUR which suggests limited downside movement potential for spot and ongoing risks for renewed push higher. Support is 1.0900/10. Resistance is 1.0980; above here targets EUR gains towards 1.10/1.11.”