EUR/USD retreats from daily highs, looks to close in positive territory above 1.1800
- EUR/USD remains on track to snap a six-day losing streak.
- US Dollar Index reversed its direction after climbing above 93.60.
- ECB will reportedly adopt a more optimistic tone on Thursday.
The EUR/USD spent the first half of the day moving sideways near 1.1770 but gained traction during the early American session amid broad-based USD weakness. After climbing to a fresh daily high of 1.1831, the pair retreated slightly in the last hours and was last seen gaining 0.25% on the day at 1.1809. Unless EUR/USD drops below 1.1767 in the remainder of the day, it will snap a six-day losing streak.
On Wednesday, risk flows took control of the market action and the greenback struggled to find demand as a safe-haven. The US Dollar Index (DXY), which rose to its highest level in more than three weeks at 93.66 earlier in the day, staged a sharp U-turn. At the moment, the DXY is down 0.27% on the day at 93.27. Reflecting the upbeat market mood, the S&P 500 Index is up 2.6% at 3,419.
Eyes on ECB's September meeting
On the other hand, the shared currency gathered strength after a Bloomberg report claimed that the European Central Bank will adopt a more optimistic tone on the outlook on Thursday.
Citing sources with knowledge of the matter, Bloomberg said the ECB will revise its 2020 GDP expectations in its updated projections higher amid stronger private consumption.
Previewing the ECB meeting, “amid the slew of measures including balance sheet expansion and liquidity injection, the ECB is still in “implementation” mode and has sufficient flexibility to continue buying assets," said Lee Sue Ann, Economist at UOB Group. "However, the meetings in September and October will be crucial as far as discussions on expanded stimulus are concerned.”
Technical levels to watch for