At its highest of 1.3215 so far on Thursday, EUR/USD was up 1.87 percent from a 2-month low of 1.2968 it touched Tuesday and the rally was based on expectations the European Central Bank (ECB) will do something constructive to help its debt-ridden periphery and support growth in the region.

After a policy announcement by the ECB in expected lines, the market is awaiting the press conference by Trichet and the pair is testing resistance a little below 1.320, where IBTimes projected on Monday. A strong Chinese industry data earlier in the day also suggested recovery for risky assets, helping the single currency gain against a broadly down greenback.

If the ECB lives up to market expectations, the pair could rise further but a strong resistance area is up there, between 1.3266 (key long-term resistance) and 1.3357 (38.2 fibonacci retracement from June 7 lows), between which the 100-day SMA (1.3323) is also falling.

Momentum indicatos 14-day RSI and MACD also indicate upward momentum for the pair on the daily chart.

However, investors who are pessimistic about the currency may expect the pair falling back to the Monday lows and if the signal is strong enough on the downside, may target EUR/USD near its key long term support of 1.288 before heading to the 61.8 Fibonacci of 1.279.

Weekly jobless claims numbers for the US may give cues later in the New York session.