The euro seems to be in focus ahead of a European Central Bank (ECB)meeting later on Thursday, where any positive comments about the economic outlook or hints of tapering bond purchases are expected to help the euro.

Analysts at National Australia Bank give their view on the ECB monetary policy announcement. “Meeting should be without any controversy without any change in policy settings, no new forecasts, all against a rather benign market background.”

“The question will be, is this a meeting where the overall message is the ECB is sufficiently encouraged by the outlook to allow markets to think an upgrade is coming in June, or will developments such as the Euro bounce (itself a sign of a global recovery) and the limited progress in the Recovery Fund, ensure the ECB toes an ongoing cautious line?”

On the other hand, The dollar is trading downside against many majors as fading gains in U.S. Treasury yields reduced the greenback’s interest rate advantage.

Sentiment toward the dollar has decreased as last month’s spike in Treasury yields reverses course, but few analysts say the outlook over the longer term remains positive due to a strong U.S. economy and an improved coronavirus vaccination programme.

Economists say that “The US economy will grow at its fastest annual pace in decades this year and outperform most of its major peers, with the outlook upgraded sharply.” But It has to noted that the survey also mentioned the COVID-19 surge as the biggest risk over the next three months.

There is a optimism among the economists predicting a boost to economic activity from the $1.9 trillion pandemic relief package already passed and also from U.S. President Joe Biden’s proposed $2 trillion-plus infrastructure plan

EUR/USD 4 Hour Chart:

Support: 1.2008 (S1), 1.1981 (S2), 1.1963 (S3).

Resistance: 1.2054 (R1), 1.2071 (R2), 1.2099 (R3).

The ECB’s monetary policy expectation gives a positive outlook towards Euro and we expect a bullish trend for EUR/USD.