- ECB will announce its monetary policy decision in minutes.
- The euro is calm holding on to Wednesday’s gains.
- EUR/USD remains sideways, not moving away from 1.0700.
EUR/USD remains relatively calm ahead of the ECB decision trading around 1.0700. This tranquility is estimated to be altered initially by the decision and then by the words of Christine Lagarde. The pair bounced in the last hours from 1.0693, rising towards 1.0730.
Waiting for the ECB
The European Central Bank (ECB) will announce the decision on interest rates and the purchase program at 11:45 GMT. No changes are expected with respect to the rates and that the end of the purchase program will be formalized. In addition, the statement, the market expects, of clear signs of a rise in the rate for the July meeting. Market expectations are that the first rise in the rate in 11 years will occur in July.
At 12:30 GMT Christine Lagarde, the President of the ECB will give a press conference and provide the context of the decision. At the same time, the new macroeconomic projections of the central bank will be published.
The euro it is to be hoped that he will be affected by the statement and then by the words of lagarde. A possible key factor will be whether she hints at a possible 50 basis point hike instead of 25 basis points in July. That could boost the euro.
However, a lot of volatility is expected in the euro crosses. EUR/USD has been unable to break significantly from 1.0700 for days. To the upside, a firm break of 1.0750 would enable further rally with first target of May highs at 1.0785. In the opposite direction, there is support at 1.0680 and a stronger one below it around 1.0650, where the 20-day moving average is.
The dollar arrives at the ECB decision trading flat on Thursday. The weekly report of unemployment benefit applications. The key data will be on Friday with May inflation.
Technical levels
Source: Fx Street
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