- EUR/USD fades the knee-jerk to 1.1200 and targets 1.1300.
- ECB leaves monetary conditions unchanged today.
- Rates are expected to remain at present levels at least through H22020.
The single currency us now accelerating its daily correction higher and is pushing EUR/USD back to the vicinity of 1.1300 the figure, flirting with 2-month tops.
EUR/USD bid near 1.1300
Spot gathered further steam after the ECB left unaltered its monetary conditions at today’s meeting, matching the broad consensus.
At his usual press conference, President Draghi highlighted the negative impact on sentiment from geopolitics and ongoing trade tensions. Draghi also stressed the bank remains ready to act in case of adverse contingencies.
The ECB also revised down its projections for GDP and now sees the economy in Euroland expanding 1.2% (from 1.1%) this year, 1.4% (from 1.6%) in 2020 and 1.4% (from 1.5%) in 2021.
Regarding inflation, the ECB sees consumer prices rising at a slower pace in the upcoming months, although it assesses that underlying inflation is expected to increase. According to the bank, the CPI is now expected to rise at an annualized 1.3% (from 1.2%) in 2019, 1.4% (from 1.5%) during the next year and 1.6% (unch.) in 2021.
Draghi reiterated once again that an ample degree of monetary accommodation is still needed.
EUR/USD levels to watch
At the moment, the pair is advancing 0.57% at 1.1285 and a breakout of 1.1288 (high Jun.5) would target 1.1323 (high Apr.13) en route to 1.1343 (200-week SMA). On the other hand, the next down barrier lines up at 1.1217 (55-day SMA) followed by 1.1190 (21-day SMA) and finally 1.1116 (low May 30).
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