- Euro strengthens moderately after the ECB statement with the decisions.
- EUR/USD goes from daily lows to three-day highs.
- Volatility is expected to remain elevated for now.
EUR/USD is reacting to the European Central Bank announcement and is now waiting for the Lagarde conference. The pair rose to 1.0749, reaching the highest level in three days.
Immediately after the statement, EUR/USD fell to 1.0687, a new daily low, but then bounced higher towards 1.0750, although unable to break above that level for the time being. Sharp rallies are expected to continue for the next few minutes, with the Euro looking to define a direction.
Part of the rise in the euro has to do with the advance in german bond yieldsyes The 10-year tranche went from 1.36% to 1.45%, the new maximum since 2014.
The ECB kept benchmark interest rates as expected and said it intends to raise rates by 25 basis points in July and again in September, although it could be at a different pace, depending on the data. The announcement was generally in line with what was expected, without major surprises. The turn of the ECB would lead to the first rise in the interest rate in 11 years in July.
At 12:30 GMT Christine Lagarde will explain the decisions and answer questions. At the same time, in the US, the weekly report on requests for unemployment benefits will be published. On Friday it will be the turn of the US retail inflation for May.
Technical levels
Source: Fx Street
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