EURUSD at support ahead of ECB meeting and rate decision
The EURUSD is in focus today as the ECB has given guidance that this month’s meeting is important. The stock markets were all rising yesterday and have unwound any bearish correction from Friday/Monday’s trading.
Market Brief
Today is mainly about the ECB, their main refinancing rate, their monetary policy statement, and then the press conference headed up by President Lagarde.
ECB President Lagarde has talked about a July policy change and for markets to expect a forward guidance review in today’s policy announcement. It is unlikely that the council debate the end of PEPP but Lagarde has stated that it will transition into something else eventually. The ECB is closely monitoring long-term nominal bond yields as a guide.

The ActivTrades sentiment indicator shows that 71% of traders are bullish on the EURUSD which would usually be a signal to contrarian traders like me to fade any rips. However, today with the ECB meeting I wouldn’t recommend making any trades on the euro until after the press conference.

The EURUSD has found support at a rising trend line and today's London open has started positively for the single currency. The correction down to yesterday’s low around 1.1750 has been very controlled and the descending channel could easily break to the upside. If the price were to rise above the swing high formed at the end of June, there is a volume gap all the way to 1.2100 which would make for a good long trade.
US equities were in melt-up mode yesterday with the final push higher coming towards the end of trading. The continuation of the longer trend direction brought the Asia-Pac indices higher with the Nikkei rising for the 3rd consecutive day after finding 27,110 as support on Monday.

Today is a bank holiday in Japan and it is also the day before the Olympics is due to start. COVID-19 worries persist but the situation appears to be stable enough to enable the opening of the 2020 Summer Olympics in Tokyo.

Currently, the GBP is bid against all the other major crosses, whilst the CAD is weakest. There is no clear risk-on/off direction so picking trades is not going to be as easy.
The market did not get the stimulus bill from the USA passes last night as it was blocked by the Republicans 49-51. Though a second vote is likely next week. Next week they also need to get the debt ceiling talks underway or risk going into a summer recess without the government being able to guarantee payment to its employees and have funds available for the services it provides. The US dollar is likely to be moving quite a bit these next few days/weeks.