EUR/USD briefly returns below 1.0600 after ECB, pending Lagarde

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  • EUR/USD fell back below 1.0600 on Thursday.
  • The ECB raised rates 50 basis points at its event.
  • Attention now turns to Lagarde’s press conference.

He EUR/USD lost ground after the initial rise to the 1.0630/35 band and returned below 1.0600 following the ECB interest rate decision, dipping to fresh daily lows at 1.0551, but is now regaining ground.

EUR/USD is now focused on Lagarde

EUR/USD is leaving initial optimism behind and refocusing on the area below the 1.0600 zone after the ECB announced a 50 basis point rate hike at its event on Thursday.

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In effect, the central bank raised the interest rate of the main refinancing operations, the interest rate of the marginal credit facility and the deposit facility to 3.50%, 3.75% and 3.00%, respectively.

Based on updated macroeconomic projections, the ECB expects the economy to grow by 1.6% in 2024 and 2025, while inflation will average 5.3% this year and 2.9% in 2024.

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The ECB refrained from signaling future interest rate moves as it sees inflation still high.

Investors will closely follow President Lagarde’s usual press conference.

EUR/USD Levels

For now, the pair is up 0.22% at 1.0600 and a break of 1.0759 (March 15 monthly high) would target 1.0804 (Feb. 14 weekly high) en route to 1.1032 (2023 Feb. 2 high).

On the other hand, the next support lies at 1.0516 (monthly low on March 15), followed by 1.0481 (2023 low on January 6) and finally 1.0323 (200-day SMA).

Source: Fx Street

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