- The pair rebounded sharply from lows near 1.1300.
- The ECB left rates unchanged, broadly in line with forecasts.
- Draghi said economic outlook faces downside risks.
After briefly visiting YTD lows in the 1.1300 neighbourhood, EUR/USD staged a strong rebound to the vicinity of 1.1380, where it seems to have met strong resistance.
EUR/USD still under pressure
Spot has once again tested and failed around the key 55-day SMA in the 1.1380 area following the sharp sell off to the boundaries of 1.1300 the figure, home of the yearly lows so far.
EUR was initially hurt after President Mario Draghi stressed that the economic outlook in the region is now facing downside risks, although he made it clear the Council unanimously thinks the probability that the ongoing slowdown could morph into a recession remains low.
Back to the US, Initial Claims rose 199K WoW, posting the first reading below 200K since October 1969. Additional data surprised to the upside, as Markit’s January advanced manufacturing PMI came in at 54.9 and services PMI at 54.2.
What to look for around EUR/USD
It follows from today’s ECB meeting that the Council will be closely monitoring the upcoming data in the region in the next months. Furthermore, policymakers at the ECB will continue to gauge whether the ongoing slowdown is temporary or it will among us for longer.
EUR/USD levels to watch
At the moment, the pair is down 0.18% at 1.1360 facing the next support at 1.1306 (2019 low Jan.3) followed by 1.1269 (monthly low Dec.14 2018) and finally 1.1215 (2018 low Nov.12). On the flip side, a break above 1.1396 (10-day SMA) would target 1.1415 (21-day SMA) en route to 1.1442 (38.2% Fibo of the September-November drop).
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