EUR/USD holds steady above 1.0400; looks to ECB for fresh impetus

• EUR/USD consolidates in a range ahead of the crucial ECB monetary policy meeting.
• The ECB is widely expected to cut rates for the fifth consecutive meeting, by 25 bps.
• This marks a divergence in comparison to the Fed's hawkish pause and favors bears. 

The EUR/USD pair struggles to capitalize on the overnight bounce from the 1.0380 area or the weekly low and oscillates in a narrow band during the Asian session on Thursday. Spot prices currently trade around the 1.420 region, nearly unchanged for the day as traders opt to wait on the sidelines ahead of the highly-anticipated European Central Bank (ECB) meeting. 

The ECB is widely expected to lower borrowing costs for the fifth straight meeting on the back of persistent low inflation and subdued economic growth in the Eurozone. Moreover, the markets have been pricing in the possibility of three more rate cuts by the end of this year amid concerns over the potential economic fallout from US President Donald Trump's threatened trade tariffs. This, in turn, is seen acting as a headwind for the shared currency and the EUR/USD pair amid a modest US Dollar (USD) uptick. 

Despite Trump's demand for lower interest rates, the US central bank decided to stand pat at the end of a two-day meeting on Wednesday and signaled that there would be no rush to lower borrowing costs until inflation and jobs data made it appropriate. The Fed's hawkish pause acts as a tailwind for the USD and further contributes to capping the EUR/USD pair. That said, a fresh leg down in the US Treasury bond yields keeps a lid on the USD and supports the currency pair heading into the key central bank event risk.

Apart from the crucial ECB decision, traders on Thursday will look to the release of the Advance US Q4 GDP print, which might influence the USD price dynamics and provide some impetus to the EUR/USD pair later during the North American session, Nevertheless, the divergent ECB-Fed policy expectations suggest that the path of least resistance for the EUR/USD pair is to the downside. Hence, any attempted recovery move might still be seen as a selling opportunity and run the risk of fizzling out rather quickly.