- The euro retreats, market participants assimilate the new strategy of the ECB.
- Momentum from EUR / USD losses dips below 1.1850.
The EUR/USD It peaked at 1.1868, the highest level in two days earlier on Thursday after the publication of the new European Central Bank strategy. The dollar then regained ground and then fell back below 1.1850.
At time of writing, the EUR / USD is trading at 1.1838 / 40, up 50 pips on the day and far from the recent low. The rebound in the euro came after the European Central Bank set a new symmetric inflation target of 2% and announced that it would tolerate temporarily exceeding the target. The Swiss franc was the one that benefited the most from the announced will, the yen is the best performer amid risk aversion.
Major stock indices in the US and Europe and dropping considerably, albeit far from lows. During the last hours, market confidence improved, driving a recovery in stocks and raw materials. US yields are at lows but still approaching monthly lows. The 10-year US dollar is at 1.29%, on track to the lowest close since February, but moving away from 1.24% hours ago.
From a technical perspective, the EUR / USD rally lost steam after failing to stay above the 1.1860 zone. On the downside, immediate support is seen at 1.1830 and then 1.1815 (20-hour moving average). A slide below would expose 1.1800 which, if broken, should lead to a test of 1.1780 (July 7 low).