EUR/USD steady near 1.2400 ahead of ECB

• EUR/USD in a small range ahead of ECB. 
• US Dollar recovery losses momentum. 

EUR/USD is about to end flat, around the 1.2400 region waiting for the European Central Bank meeting. 

The pair recovered during the US session after falling to 1.2383. It moved all day in a small range after being rejected from above 1.2425. 

On Wednesday, the US dollar received support from Commerce Secretary Ross and Treasury Secretary Mnuchin comments. They said tariffs might have some exceptions. Later White House official mentioned that President Trump hopes to sign steel and aluminium tariffs on Thursday and hinted at some exceptions for Canada and Mexico. 

The greenback also gained some support from US data ahead of Friday’s NFP. ADP reported a gain of 235k in February above expectations of 195K. Another data released on Wednesday included a $56.6bn deficit for January. 

Regarding the euro, it rose against the Swiss franc (EUR/CHF above 1.1700) but failed to hold to gain versus the pound. On Thursday the ECB is expected to keep interest rates and asset purchases ($30bn per month until September) unchanged. Market participants will likely focus on staff forecasts and Draghi’s press conference. Volatility near the event (12:45 and 13:30 GMT) is likely to rise (particularly during Draghi’s presentation) in euro and Swiss franc crosses. 

Technical levels 

To the upside, resistance levels for EUR/USD are seen at 1.2435, 1.2450 and the key 1.2480/1.2500 (long-term downtrend line). A close significantly above the last one could clear the way to more gains. On the flip side, supports might lie at 1.2355/60, 1.2280 and 1.2255/60 (Feb 22 low).