- On Monday, the shared currency loses 0.24% after the ECB’s Lagarde comments.
- A positive market mood keeps the euro underperforming on the wrong foot, while the dollar advanced modestly.
- If the EUR/USD makes a daily close below the 100 DMA, it would add more downward pressure on the pair.
On Monday, the EUR/USD cut Friday’s gains in the New York session, down 14%. At press time, it is trading at 1.1424, as ECB President Christine Lagarde is making remarks in the last hour.
Market sentiment is upbeat though, in the FX complex, USD recovers on the day with the US Dollar Index advancing 0.05% to 95.55, weighing on EUR/USD.
ECB President Lagarde appears at the EU Parliament
Appearing in the EU Parliament, ECB President Christine Lagarde said “inflation is likely to remain high in the short term.” However, she emphasized that “there are no signs that the 2% goal will be significantly exceeded in the medium term.” In addition, she pointed out that “it will remain above the 2% goal, but it would be lower than current levels.”
It appears that in the Q&A session, the ECB’s Lagarde downplayed the aggressive tone perceived by market participants in last Thursday’s ECB monetary policy pivot. Following Lagarde’s quotes, EUR/USD pulled back from 1.1450 to current levels.
Earlier, during the European session, the EU economic docket revealed that German industrial production for December contracted by 0.3% when estimates pointed to a 0.4% rise.
ECB member Klaus Knot said the bank should end the PPP and noted that a fourth quarter rate hike is possible. Meanwhile, the ECB’s Kazakhs noted that “a July hike would imply an extremely fast and unlikely rate of reduction, with a higher risk of persistent inflation: net purchases of new assets become less necessary.”
On the other hand, an absent economic docket has EUR/USD traders awaiting US inflation figures on Thursday.
EUR/USD Price Forecast: Technical Outlook
EUR/USD threatens to break below Pitchfork’s upper trend line around 1.1415-20. In the event of a daily close below this, it would exacerbate a move down towards the Pitchfork midline, but it would have to overcome a few hurdles on the way south first. The first support would be 1.1400. A breach of the latter would expose a four-month uptrend line around the 1.1340-50 zone, followed by the 50-day moving average (DMA) at 1.1317.
Additional technical levels
EUR/USD
| Panorama | |
|---|---|
| Last Price Today | 1.1422 |
| Today’s Daily Change | -0.0033 |
| Today’s Daily Change % | -0.29 |
| Today’s Daily Opening | 1.1455 |
| Trends | |
|---|---|
| 20 Daily SMA | 1.1329 |
| 50 Daily SMA | 1.1316 |
| 100 Daily SMA | 1.1429 |
| 200 Daily SMA | 1.1677 |
| levels | |
|---|---|
| Previous Daily High | 1.1484 |
| Previous Daily Minimum | 1.1412 |
| Previous Maximum Weekly | 1.1484 |
| Previous Weekly Minimum | 1.1138 |
| Monthly Prior Maximum | 1.1483 |
| Previous Monthly Minimum | 1.1121 |
| Daily Fibonacci 38.2% | 1.1456 |
| Daily Fibonacci 61.8% | 1.1439 |
| Daily Pivot Point S1 | 1.1416 |
| Daily Pivot Point S2 | 1.1378 |
| Daily Pivot Point S3 | 1.1344 |
| Daily Pivot Point R1 | 1.1489 |
| Daily Pivot Point R2 | 1.1522 |
| Daily Pivot Point R3 | 1.1561 |
Source: Fx Street
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