The ECB policymakers will hold a meeting today, facing the dilemma of whether to take more actions to spur growth and weaken the currency, which is near a 2 1/2-year high on a trade-weighted basis. The eurozone producer price index dropped 0.2% in February and was down 1.7% year-on-year. The year-on-year decline was the largest since late 2009 and is yet another element adding to the deflation concerns in the region. The PPI report will put more pressure on the European Central Bank to ease its monetary policy in order to jumpstart economic growth in the currency bloc.

Inflation in the EU also fell to its lowest level since November 2009 in March. We expect Draghi’s comments at his press conference could very well give guidance on what the ECB will do in the coming weeks. Investors remain cautious about the euro, as the euro zone policymakers are trying to tame the euro's recent strength.

Technical view-

EUR/USD has been in a down trend from 1.3967 levels. In Asia the pair is trading at 1.3767. The pair has strong support level at 1.37 (50SMA). Once the pair closes below this for a day, it will fall up to 1.3546 (200SMA) with intermediate supports at 1.3562 and 1.355 levels. More panic below the 1.3546 for 1.3477 (bulls last hope).

On the up side, the pair is facing resistance at the 38.2 fib level between 1.3791-1.3820 above this 1.3876. RSI is still favoring sell side in the daily chart.

Intraday- The pair is facing strong resistance between 1.3777-1.3792. RSI in the H4 chart is giving a positive direction. On the down side, the level of 1.3753 is the first support, if the pair breaks this, it will fall to 1.3722, 1.3705, and 1.3656 levels. Until the pair crosses the levels of 1.38-1.3848, sell on rise is the best strategy. Bulls can take longs with sl at 1.375.