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EUR/USD: getting prepared for ECB showdown

FXStreet (Guatemala) - EUR/USD is awaiting the ECB tomorrow. There is expected to be a dovish tone while participants weigh up the prospects of extended QE from the Central Bank to battle troublesome conditions in the EZ economy.

Weight is tilted to the downside in the major, and verbal intervention from the ECB might be expected should the price move anywhere close to 1.1500 anyway.

Meanwhile, the docket is quiet and we will await tomorrow's outcome. For a preview, see here. "If the ECB decides to continue buying €60bn a month, mostly in government bonds, repeating that the program will extend until September 2016, or further if needed, the market will likely be disappointed and will sell the common currency," explained Valeria Bednarik, chief analyst at FXStreet, in her article.

Read: What is ECB Quantitative Easing?

Technically, key upside comes at 1.1440/72 band (May, June and September highs, the 55 week ma and the 2014-2015 downtrend), and these are leaving the major in a bearish phase. The 1.1260/51 cloud lows are now open for a testing and the September lows at 1.1105/1.1088 could come under pressure.

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