- The EUR/USD weakens around 1,1365 in Thursday’s European session, lowering 0.28% in the day.
- The positive bias of the tar prevails above the 100 -day EMA, but the RSI overcompra condition could limit its rise.
- The immediate resistance level arises in 1,1455; The first downward objective to monitor is 1,1264.
The EUR/USD pair attracts some vendors to around 1,1365 during the European session on Thursday. Operators could prefer to stay out of the margin waiting for the decision on the interest rates of the European Central Bank (ECB) later on Thursday. It is widely anticipated that the ECB cuts its key interest rate in 25 basic points (PBS) at its April meeting, marking a sixth consecutive reduction in the midst of global tariff tensions and economic uncertainty.
According to the daily graph, the constructive perspective of the EUR/USD remains intact since the main torque is maintained above the exponential mobile (EMA) average of 100 days. However, the 14 -day relative force index (RSI) is above the midline about 71.50, indicating the RSI overcompra condition. This suggests that greater consolidation cannot be ruled out before positioning for any appreciation of the EUR/USD in the short term.
The upper limit of the Bollinger band in 1,1455 acts as an immediate resistance level for the main torque. A decisive rupture above this level could see a rebound towards 1,1481, the maximum of January 13, 2022. More to the north, the next obstacle to monitor is 1,1608, the maximum of November 9, 2021.
In the bearish case, the initial support level is at 1,1264, the minimum of April 15. Any additional sale below the mentioned level could expose the psychological brand of 1,1100. Extended losses could see a drop at 1,0780, the minimum of April 2.
BCE FAQS
The European Central Bank (ECB), based in Frankfurt (Germany), is the euro zone reserve bank. The ECB sets interest rates and manages the monetary policy of the region.
The main mandate of the ECB is to maintain prices stability, which means maintaining inflation around 2%. Its main tool to achieve this is to raise or lower interest rates. Relatively high interest rates often translate into a stronger euro, and vice versa.
The BCE Governing Council adopts monetary policy decisions in meetings that are held eight times a year. The decisions are adopted by the directors of the national banks of the euro zone and six permanent members, including the president of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can launch a political tool called Quantitative Easing (quantitative relaxation). The QE is the process by which the ECB prints euros and uses them to buy assets (normally state or business bonds) to banks and other financial institutions. The result is usually a weaker euro ..
The QE is a last resort when it is unlikely that a simple decrease in interest rates achieves the price stability objective. The ECB used it during the great financial crisis of 2009-11, in 2015 when inflation remained stubbornly low, as well as during the Coronavirus pandemic.
The quantitative hardening (QT) is the reverse of the QE. It is carried out after the QE, when economic recovery is underway and inflation begins to increase. While in the QE the European Central Bank (ECB) buys state and business bonds from financial institutions to provide liquidity, in the QT the ECB stops buying more bonds and stops reinvesting the main one that overcomes the bonds it already has. It is usually positive (or bullish) for the euro.
EUR/USD daily graphics
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
