EUR/USD bulls seeking a hawkish tilt from the ECB.

EUR/USD is the horse to watch this week, but did it already bolt？

EUR/USD bulls seeking a hawkish tilt from the ECB.

US dollar is looking into the abyss, but a correction may not be far off.

EUR/USD is trading flat in a quiet start to the week with North America out for the day on holiday.

The bulls are on top all the way to a current daily resistance and while the bearish bets are down for the greenback, the question is whether the horse has already bolted at this juncture？

The US dollar is notably weaker and EUR/USD touched 1.1909 (a two-month high) post-US Nonfarm Payrolls on Friday.

The price has since returned to the 1.1880s support ahead of the European Central Bank this week.

Markets have already started to price in a more hawkish narrative at the central bank while simultaneously dialling back prospects of an imminent taper from the Federal Reserve.

This has fuelled the rally in the euro.

The ECB hawks are spooked by the recent rising inflation numbers but the doves are firmly in control right now and so the policy is likely to remain loose for the time being.

However, certain members of the central banks are less dovish, including Governing Council member Francois Villeroy said the bank should consider more favourable financing conditions in the eurozone in deciding on the pace of PEPP this week.

Villeroy has been considered one of the uber-doves and so his comments are noteworthy.

This suggests a possible slowing in asset purchases, aka, a taper.

However, Villeroy stressed that any changes would not amount to tapering when he said, “on monthly volumes, we are looking at the favourable financing conditions, and we should underline that they are more favourable than at our June meeting. We have to decide the monthly volumes for the fourth quarter.”

This means that while discussions may be taking place, a move from the ECB may not come for some meetings later which is where the euro would be exposed to long covering.

''We do not think a consensus will be reached until the December 16 meeting,'' analysts at Brown Brothers Harriman argued in this regard.

Meanwhile, the US dollar is looking down into the abyss.