- The US dollar regains strength against the main currencies, still negative on the day.
- The EUR / USD fails to break out of the recent range after being rejected above 1.1350.
- ECB meeting: There are no major surprises.
The EUR / USD rose to 1.1360, the highest level in two weeks, but failed to stay above 1.1350 and pulled back. The pullback is challenging the 1.1300 zone during the American session after the US dollar regained ground across the board.
Between data, central banks and expectations
US economic data released on Thursday was mostly below expectations, particularly PMIs. Market participants ignored the data. In Europe, the key event was the meeting of the European Central Bank.
The euro initially reacted positively to the ECB meeting. The central bank left rates unchanged and cut its bond purchases, mostly in line with expectations. “With today’s decision, the ECB has entered a very cautious downsizing process. The details of the adjustment are less clear than we expected. The ECB did not announce a (third) transitional asset purchase program. Instead, it decided guaranteeing the same level of flexibility for the PEP in asset purchases, including allowing it to buy Greek bonds, and with the reinvestment of PEPP purchases, “explained ING analysts.
Later, the common currency lost momentum and began to retreat, returning previous gains. At the same time, the US dollar gained strength, pushing the EUR / USD further down. Up to now, correction found support at 1.1300.
EUR / USD is back in the previous trading range between 1.1350 and 1.1250. The euro needs a firm breakout above 1.1350 / 60 to clear the way for further gains. On the other hand, a drop below 1.1250 would point to more losses.
EUR / USD technical levels
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