EUR/USD choppy around 1.0780 ahead of ECB

The single currency keeps the buoyant tone intact on Thursday amidst a broad-based offered bias around the buck, sending EUR/USD to the 1.0780 area during the European morning.

EUR/USD all eyes on the ECB

Spot is advancing for the second consecutive session, meandering just below the 1.0800/15 band, where coincide Monday’s tops and the 38.2% retracement of the November drop.

Cautiousness and further consolidation are expected around the pair as we get closer to the ECB meeting and subsequent press conference by President Mario Draghi.

Consensus among investors sees the central bank extending its bond-purchase programme beyond March 2017, likely for an extra six months, leaving unchanged the monthly pace at €80 billion.

In addition, the central bank will revise its forecasts for inflation and growth in the region for the upcoming years, while market participants will pay special attention to any hint of potential tapering of the current QE programme at some point in 2017.

Other than the ECB gathering in Euroland, the usual weekly report on the US labour market is only due across the pond.

EUR/USD levels to watch

The pair is now up 0.20% at 1.0776 and a break above 1.0798 (high Dec.5) would target 1.0815 (38.2% of the November drop) en route to 1.0848 (low Oct.25). On the flip side, the immediate support aligns at 1.0696 (low Dec.7) followed by 1.0669 (20-day sma) and finally 1.0503 (2016 low Dec.5).