“¢ More generous TLTRO terms provide a goodish lift to the shared currency.
“¢ An upward revision of ECB’s 2019 GDP/inflation forecasts remained supportive.
“¢ Talks of a possible rate cut kept a lid on any strong follow-through up-move.
The EUR/USD pair faded a bullish spike to fresh multi-week tops and quickly retreated around 50-60 pips in the post-ECB trading action.
Having dropped to the 1.1200 neighbourhood in reaction the latest ECB decision to maintain status-quo, the pair witnessed a dramatic turnaround and rallied over 100-pips in the wake of more generous TLTRO terms.
Bullish traders largely shrugged off a dovish shift to the ECB’s forward guidance to keep rates on hold until H1 2020 and rather took cues from an upward revision of the Euro-zone GDP/inflation forecasts for the current year.
The positive momentum, however, started losing momentum after the ECB President Mario Draghi, in the post-meeting press conference said that several members of the Governing Council raised the possibility of rate cuts.
Draghi further added that it will not be correct to say that the ECB guidance is tilted to rate hikes rather said that the central bank has considerable headroom on QE and comfort of law for restarting the Asset Purchase Program.
The pair continued with its struggle to sustain and build on its momentum beyond the 1.1300 handle, though the prevailing US Dollar selling bias remained supportive of the bid through the early North-America session.
Technical levels to watch
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