The ECB's monetary policy meeting is due today with deposit rate cuts, QE expansion on the table. The markets are heading into today's events with modest expectations so the scope for a surprise is very much a key risk to the EURUSD. Price action has remained flat over the past two days and could see a possible strong reaction to the ECB's decision.
EURUSD Daily Analysis
EURUSD (1.09): EURUSD has formed two days of flat price action with small bodied candlestick patterns close to the 1.10 handle. Price action remains range bound ahead of the ECB's meeting today, which is likely to see a strong breakout in either direction. The 4-hour chart in EURUSD has shown a triangle pattern with the upside likely to see resistance at 1.113 - 1.1105, while to the downside, 1.095 - 1.093 comes in as support. Over these levels, 1.1335 resistance is the next big level while to the downside 1.0835 - 1.0825 forms the lower support.
USDJPY Daily Analysis
USDJPY (113.7): USDJPY has managed to close bullish yesterday with current price action looking to move higher. Prices are trading near the outer trend line of the descending triangle and a breakout here could see a move towards the outer median line which could invalidate the downside bias. Support at 112.5 looks to be holding for the moment as prices could target 117.25 - 117 resistance level. If the current rally fails to break above 114.35, the previous recent highs, USDJPY could see another dip back to 112.5 which could make a potential head and shoulders pattern with a downside target to 111.0.
GBPUSD Daily Analysis
GBPUSD (1.41): GBPUSD has been trading flat below the 1.43 resistance as yesterday's price action closed with a doji. The bias remains flat at the moment with the limited downside to 1.4025 - 1.40 lower support. The minor trend line on the 4-hour chart could act as a dynamic support level limiting the downside, but a break below this trend line could signal a move to 1.4025 - 1.40. The upside remains capped with the resistance zone of 1.435 - 1.43 levels.
Gold Daily Analysis
XAUUSD (1247): Gold prices are trading near the $1250 handle following the failed breakout higher. However, as long as prices are above this level, the scope for upside stays intact. On the 4-hour chart, the next lower support comes in at 1230 - 1225 levels if price breaks below 1250. Gold could remain within the 1250 - 1225 levels unless we see a strong breakout either above or below these levels. 1275 is the level to watch to the upside, while 1225 is key, following which a test to 1200 could be a possibility.