EUR/USD: Back above 200-week MA ahead of Draghi speech

• The EUR/USD has faded the drop below the 200-week moving average (MA).
• The recovery could be extended further to 1.14 if ECB's Draghi reaffirms commitment to end the QE program in December.
• Brexit chaos and the resulting action in the EUR/GBP could also influence the EUR/USD.

The EUR/USD is currently trading at 1.1335, having printed a low of 1.1215 earlier this week.

The move back above the 200-week MA of 1.1308 could embolden the bulls as the long-term moving average had put a floor under the pair in the last two weeks. Further, the MA had reversed pullback in August.

A move higher to 1.14, however, depends on what the European Central Bank (ECB) President Draghi says during the keynote speech at the Frankfurt European Banking Congress, scheduled at 08:30 GMT.

The common currency could pick up a strong bid if Draghi downplays Italy's budget crisis and reaffirms plans to end the QE program. Further, GBP/USD is likely to report losses, as indicated by the rising demand for Sterling puts. The resulting uptick in the EUR/GBP cross could also add to the bullish tone around the EUR/USD.

The pair, however, may fall back below the 200-week MA if Draghi sounds cautious, forcing markets to price-in a delay in the rate hike, currently seen happening at the end of 2019.

EUR/USD Technical Levels