Forex Market Update: Euro advances ahead of ECB rate decision

EUR-USD traded on a firmer footing after it continued to find support in front of the 1.4000 level during in the Asian session. Strong bids supported the pair on Tuesday and this theme continued overnight, which encouraged the pair to drift back in to 1.4035 in early Europe. Firmer European equity markets encouraged follow through buying and good interest for EUR-JPY, which reinforced the move higher. EUR-GBP firmness is also a feature of EUR-USD’s improvement, with the cross rallying sharply on Tuesday after a downward revision in U.K. Q1 GDP, and holding bid in Europe today. EUR-USD may challenge offers at the 1.4100 level and more are tipped at 1.4125-30 and 1.4150. Option expiries are noted today at 1.3910, 1.4000 and 1.4100, which could influence particularly with volumes expected to remain low ahead of Thursday’s ECB meeting and Friday’s U.S. NFP data.