The single currency dropped against peers as traders expect a cautious central bank on Thursday. What we could hear is a gloomy outlook and a number of risk factors that would drag on the eurozone’s economy. Markets have been pricing in a delay of an interest rate hike until next year and the ECB is likely to relaunch its stimulus with long-term loans to banks. Combined with the recovery of the US dollar, the euro could stay under pressure for a while.
On the technical side, the break of the 1.1315 daily support has added more selling pressure to the pair. 1.1280 is the next target on the downside. On the upside, 1.1350 is the immediate resistance.