EUR/USD continues to slide, 1.2150 on deck as ECB rate decision looms

• Euro tumbles once again after faking a potential recovery.
• Rising bond yields are continuing to bolster the Greenback, which is crushing in the broader FX market.
• An increasingly-dovish ECB on-deck for Thursday could help or hinder the Euro.

The EUR/USD is continuing to fall, currently testing into 1.2160 in the overnight session.

The Euro declined steadily in Wednesday's trading as the US Dollar continues to surge on lifting US Treasury yields. The 10-year note is trading over the key 3% yield level, and the Greenback is bounding higher as traders pile back into the USD, even as equities recovered in Wednesday's  US session.

The EUR ins't without its own weaknesses independent of yields, and as analysts at Danske noted that, "“Eurozone growth momentum has worn off and data have surprised on the downside, while US releases have managed to keep up. However, the loss of global growth momentum should not leave elevated US PMIs untouched and we see a risk that US indicators (notably ISM) could show some weakness near term. Meanwhile, the eurozone has already been surprising on the downside for some time but trade war concerns and past EUR strength remain a headwind.” Despite this, Danske Bank is still expecting EUR to return to 1.28 within 12 months.

EUR/USD seen at 1.28 in 12M on ECB - Danske Bank

Thursday is going to be a tense showing for the Euro, with the European Central Bank (ECB) expected to deliver their latest interest rate decision at 11:45 GMT. Expectations are limited with a lack of movement largely priced in already, but traders will be keeping a close eye on the ECB's overall tone, and as the Barclay's Research Team noted, "We do not expect a change in the ECB's monetary policy stance following its meeting next Thursday. However, we think that it will need to recognize that the activity data releases have weakened, the geopolitical risks remain elevated, and the March inflation data did not deliver positive surprises. For these reasons, we think the statement will probably sound slightly more cautious and the balance of risk a bit less upbeat than in March."

ECB Preview: no fireworks expected this Thursday - Barclays

EUR/USD Levels to watch

The Euro is painting a pretty grim picture, and hopes of a recovery are beginning to dwindle as the pair prepares to break into new lows for 2018, and as FXStreet's own Valeria Bednarik outlined earlier, "the technical picture for the EUR/USD pair is bearish, extending its decline below the 100 DMA, now over 100 pips above the current level, and nearing a relevant support, March low at 1.2154. In the short term, the risk is clearly skewed to the downside, as a second attempt to regain ground above the broken trend line resulted in a lower low. In the  4 hours chart, the 20 SMA maintains its strong downward slope, currently at around 1.2225, while technical indicators are attempting to recover ground, but remain below previous high and with the RSI still in oversold territory, hardly enough to anticipate a recovery."

Support levels: 1.2160 1.2130 1.2100                                                                     

Resistance levels: 1.2225 1.2260 1.2295