Will the ECB support the euro’s rally?

Today at 14:45 MT time, the European Central Bank releases its monetary policy statement. Shortly after that, we will hear the comments by the ECB President Christine Lagarde at 15:30 MT time. The expansion of the Pandemic Emergency Purchase Program (PEPP) last month to 1.35 trillion euros put the European markets on more stable ground. The monetary stimulus combined with better economic data (improved CPI for Germany, better-than-expected PMIs for Germany, France, Eurozone in general) pushed the euro levels against the USD to last March’s. Some analysts worry that the regulator will hold its bond-buying program earlier than needed.  

What to expect?

It’s all about balance. According to analysts, Ms. Lagarde needs to acknowledge that the data is improving, but, at the same time, to confirm the inevitability of a stimulus until clearer figures on employment and corporate bankruptcies. At the same time, the ECB President will likely ask the European governments once again to provide a joint fiscal stimulus. Some experts suggest that reaching a consensus between the member countries may be the trigger for EUR/USD’s jump towards 1.15.

Therefore, the main focus will be on the press conference with Christine Lagarde at 15:30 MT time.

Levels for the euro pairs

EUR/USD

After the test of the 1.1450 level yesterday, the pair corrected lower. There’s a “shooting star” candlestick on the daily chart. Also, we can see a bearish divergence with the MACD oscillator. Technically, we may expect the pair correcting even lower to 1.1340. At the same time, bulls may take action during the ECB meeting. As a result, the retest of 1.1450 is also possible today.

EUR/AUD

If you trade this pair, you need to focus on a breakout of the long-term descending trendline (the key point lies at 1.6420 – 50-day SMA). The Australian dollar got weaker after the worse-than-expected unemployment rate (7.4% vs. 7.2% expected). If the euro gets stronger, the breakout of the long-term resistance will motivate buyers to push the pair towards the 200-day SMA at 1.6550. The support is placed at 1.62.

EUR/GBP

The pair keeps trading within the ascending channel. At the moment, bulls keep pair close to the 50 Fibo level. The resistance lies at 0.9178, while 50-day SMA is acting as a dynamic support.

LOG IN

Author: FBS Analyst Team

More by this author

Similar

02.09.2022 17:18 Upcoming Cold winter and Burning Energy Prices, What will Europe do?

The EU plans to intervene in markets directly to curb rising energy costs, threatening to push the Euro area's economy into a deep recession.

19.07.2022 12:25 The Fed to Decide the Oil Market’s Future

The oil prices rally and world central banks’ dovish monetary policy caused by the Covid-19 pandemic were the main reasons for current inflation growth…

03.09.2021 17:47 What will move the market on September 6-10?

Last Friday’s NFP was disappointing. The reaction of the markets was astonishing. Will it last longer? Let's find out the main trade opportunities for the upcoming week.

Latest news

03.04.2024 18:19 USD: Powell Speaks on Cutting Interest Rates

Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...

28.03.2024 16:00 WTT: Currency Pairs To Trade In April

Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.

28.03.2024 06:03 EURUSD: Seeking liquidity in weekly selling zones. Key intraday levels.

Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...