EUR / USD looks volatile above 1.1800

• EUR / USD rises to 1.1840, or daily highs, after the ECB.
• Lagarde expects the economy to return to pre-pandemic levels by the end of the year.
• The risks to the economy are still considered broadly balanced.

Following a move to daily highs around 1.1840 shortly after the ECB statement, the pair EUR/USD it has now embarked on a correction to the 1.1810 region following Lagarde’s press conference today.

EUR / USD remains near 1.1800

EUR / USD manages well to stay above the key 1.1800 level after the ECB’s C. Lagarde said the rebound in economic activity in the region is progressing further, adding that the economy could return. at pre-pandemic levels by the end of the year. The ECB expects the economy to expand 5.0% this year, 4.6% in 2022 and 2.1% in the following period. Risks to growth prospects, meanwhile, come from the persistence of the pandemic and / or supply shortages.

Lagarde highlighted the rapid improvement in the labor market, as well as the cautious attitude of consumers, while production continues to be affected by shortages.

Regarding inflation, Lagarde pointed out that the current higher prices are still temporary and that medium-term inflation is still well below the target. The central bank revised up its inflation projections and now sees the CPI at 2.2% in 2021, 1.7% in 2022 and 1.5% in 2023.

In his press conference, Lagarde said that the Governing Council unanimously decided the pace of purchases under the PEPP, although he did not give clues as to when the stimulus program could end.

Technical levels

So far, the pair is gaining 0.01% at 1.1813 and is facing the next bullish barrier at 1.1909 (September 3 monthly high) followed by 1.1943 (100-day SMA) and finally 1.2000 (psychological level). On the other hand, a break below 1.1802 (Sept. 8 weekly low) would target 1.1786 (20-day SMA) en route to 1.1663 (Aug. 20 low).