The euro came under pressure in the Asian session on Wednesday, ahead of monetary policy announcement by the European Central Bank, which is expected to adjust its forward guidance, reflecting the new 2 percent inflation goal adopted by the central bank under the new strategy unveiled earlier this month.
The ECB is expected to leave its key rates and the pandemic emergency purchase programme unchanged when it concludes its rate-setting meeting on Thursday.
The policy statement will incorporate its recently adopted symmetric inflation target of 2 percent in the medium term, instead of its previous goal of "below, but close to, two per cent."
ECB President Lagarde remarked that the PEPP program would continue until "at least" March 2022.
The central bank is expected to adjust its forward guidance on monetary stimulus in order to align with its new strategy.
The new strategy allows the ECB to retain interest rates at record lows for longer periods, while tolerating higher inflation.
The euro pulled back from a 2-day high of 129.56 against the yen, with the pair trading at 129.22. On the downside, 128.00 is likely seen as its next support level.
The euro eased off to 1.0843 against the franc and 1.1762 against the greenback, after rising to 1.0854 and 1.1783, respectively in early deals. The euro is likely to face support around 1.06 against the franc and 1.16 against the greenback.
In contrast, the single currency appreciated to near a 7-month high of 1.6130 against the aussie from Tuesday's close of 1.6062. If the euro rises further, 1.64 is likely seen as its next resistance level.
The euro reversed from an early 2-day low of 1.4928 against the loonie and rose to 1.4975. Against the kiwi, the euro edged up to 1.7057 from yesterday's close of 1.7016. The euro is poised to find resistance around 1.52 against the loonie and 1.72 against the kiwi.
The euro ticked up to 0.8655 against the pound, from a low of 0.8636 seen at 5 pm ET. The euro may find resistance around the 0.88 level.
Looking ahead, Canada new housing price index for June is scheduled for release in the New York session.