Forex - EUR/USD remains lower as ECB meeting in focus

The euro remained lower against the U.S. dollar on Tuesday, as sentiment on the single currency remained vulnerable ahead of the European Central Bank's policy meeting on Thursday. 

EUR/USD hit 1.3476 during European afternoon trade, the session low; the pair subsequently consolidated at 1.3473, shedding 0.31%. 

The pair was likely to find support at 1.3338, the low of September 18 and resistance at 1.3581, the high of November 1. 

The euro remained under broad selling pressure after data last week showing that euro zone annual inflation fell to a four year low in October raised concerns that the ECB might cut rates in order to safeguard the economic recovery in the region.

While no policy change was expected from the ECB on Thursday many investors expected the bank to signal the possibility of further monetary policy easing at its meeting in December.

Separately, the European Commission cut its forecast for euro zone growth on Tuesday and said that unemployment in the region remains at unacceptably high levels.

The EC said it now expects economic growth of 1.1% in 2014 down from 1.2% and said the growth rate is expected to rise to 1.7% in 2015.

Meanwhile, data showed that euro zone producer price inflation was down 0.9% from a year earlier in September, compared to expectations for a 0.7% decline. 

In the U.S., comments by Federal Reserve officials on Monday indicated that the bank is likely to keep its stimulus program in place for some time to come.

Federal Reserve Bank of Boston President Eric Rosengren said bank should keep its asset purchase program in place until there is "compelling evidence of a sustainable recovery making satisfactory progress toward full employment." 

The euro was also lower against the pound with EUR/GBP declining 0.77%, to hit 0.8397. 

Also Tuesday, data showed that activity in the U.K. services sector expanded at the fastest rate in 16 years in October, bolstering the outlook for the economic recovery.

Markit said the U.K. services purchasing managers index rose to 62.8 in October up from 60.3 in September, the sharpest rise in activity since May 1997. Economists had been expecting the index to tick down to 59.8. 

Later in the day, the Institute of Supply Management is to release a report on service sector activity.