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ECB minutes show optimism – EUR/USD breaks above 1.20

The European Central Bank released its meeting minutes for the December meeting. They had some optimistic words about the economy, inflation, and even wages.

EUR/USD is jumping with a high of 1.1993 so far. Resistance awaits at 1.20, followed by 1.2090. Support is at 1.1960 and 1.1910. So far in 2018, EUR/USD respects technical levels very nicely.

The ECB is considering changing the forward guidance if the reflation continues. In October, they announced the reduction of the bond-buying scheme from 60 to 30 billion euros through September 2018 but left the door open for further buying afterward.

Now, the minutes tell us that they may change this guidance soon. The minutes specifically refer to “early 2018“. Will they announce the end of bond-buying after September already in the January meeting?

They see “Some comfort” in wage dynamics. While economic growth is robust, inflation is certainly missing. But if wages begin rising, inflation will likely follow. They tie the change in communication to inflation developments. The CPI data for January is released later this month.

All in all, the ECB sounds more optimistic and less cautious than Draghi’s dovish words. This is good news for the euro.

More:  Is EUR/USD still stuck around 1.20: to 1.10 or 1.30?

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.