EUR/USD hits fresh six-week highs above 1.0070

• US dollar extends slide across the board as Wall Street turns positive.
• US yields decline adding to dollar’s weakness.
• EUR/USD up for the fifth consecutive day, at six-week highs.

The EUR/USD rose further and printed a fresh six-week high at 1.0080, amid broad-based dollar weakness. It remains near the high, holding onto important daily gains the day before the European Central Bank meeting.

ECB meeting looms

The US dollar extended its correction lower on Wednesday during the American session amid a decline in US yields that reached fresh weekly lows. The DXY was falling almost 1%, trading below 110.00.

The European Central Bank will have its monetary policy meeting on Thursday. A 75 bps rate hike is expected. The decision, statement and Lagarde’s press conference will likely have an impact on euro’s crosses.

Analysts at Rabobank doubt about the possibility of the ECB sustaining a policy of large rate hikes after Thursday. They consider that taking into account the economic context, the central bank may be forced to slow the pace of its moves. “We continue to see scope for EUR/USD to drop to 0.95 into the winter months.”

Also on Thursday, the US will report the first reading of Q3 GDP growth and the weekly jobless claims report.

Going for the 100-day SMA

The EUR/USD is about to post the fifth daily gain in a row and it is consolidating above the parity and also the 55-day Simple Moving Average. The next target might be the 10-day SMA at 1.0092. Above the next resistance is seen at 1.0130.

On the flip side, a slide back under 0.9990 should alleviate the bullish pressure and could open the doors to a bigger decline initially to 0.9905 and then the 20-day SMA at 0.9825.

Technical levels