A surprise may come from comments on the exchange rate. Lagarde may note that the rise of the euro pushes inflation lower and that the ECB is monitoring its value closely. The Frankfurt-based institution does not officially target the exchange rate, but it could hint that its recent rise may trigger a rate cut – that would already shock markets and send the euro down, but the chances remain slim at the moment.

Euro/dollar may receive a boost from the US Food and Drugs Administration, which is set to approve the Pfizer/BioNTech coronavirus vaccine, following Canada’s and Britain’s footsteps. A shot in the arm could not come sooner – over 3,000 lives were lost to the virus in America on Wednesday, similar to the death toll in 9/11.

Apart from US fiscal stimulus, investors will also be watching America’s inflation figures, which are set to edge higher in November, and weekly jobless claims. Applications for unemployment benefits are set to rise after dropping last week.

Overall, a busy day awaits traders, with room to the downside. 

EUR/USD Technical Analysis

(Click on image to enlarge)

Euro/dollar has slipped below the uptrend support line that had accompanied it since early December. While the currency pair recaptured the 50 Simple Moving Average, it has yet to top the broken trendline. Momentum remains to the downside.

All in all, bears are in the lead.

Support awaits at 1.2080, which was a swing low on Monday. It is followed by Wednesday’s trough at 1.2060. Further down, 1.2040 and 1.2005 are eyed.

Some resistance is at the daily high of 1.21, followed by 1.2045, which capped EUR/USD on Wednesday. The next level to watch is the 2020 high of 1.2177.