Coming into this week, the ECB rate decision set for this morning appeared to be a pretty big event. This was the first rate decision for the bank in the New Year, and just the second since the ECB elected to extend their stimulus program into September of 2018. But already, we had started to hear the initial rumblings of a bank looking to prepare for an exit from stimulus. When the meeting minutes from the ECB’s December rate decision showed that the topic of forward guidance was front-and-center for the European Central Bank, markets grasped on to the premise that the ECB was starting to tip their hand towards an eventual taper announcement for later this year.

This mention of forward guidance in the meeting minutes from that December rate decision helped to bring bulls back into EUR/USD, and the pair traded up to fresh three year highs just one day after those comments were released. Little has been able to slow down that bullish move over the past two weeks as buyers have remained very much in-control. Last week brought a two-and-a-half day pull-back into the pair and we pointed out a key area of Fibonacci support that buyers had begun to respond to. This support helped to hold the lows in the pair as we came into this week, at which point USD-weakness started to really take over.

On the daily chart below, we’re looking at the continued topside run towards the key level of 1.2500 in EUR/USD after last week’s check of support.

EUR/USD Daily Chart: Bulls Take Over After Last Week’s Support

EUR/USD POTENTIAL SUPPORT

For traders looking at taking-on bullish exposure here, current levels could prove challenging given how far away we are from prior support. Last week’s Fibonacci inflection took place off of 1.2167, and that’s more than 300 pips away from current price action. Instead, bullish approaches can look for a pullback to a shorter-term potential support level, at which point longs can be triggered when/if support does in-fact show-up. On the chart below, we’re looking at four potential areas where this might take place above that prior point of support at 1.2167.