- ECB left its key rates unchanged, matching the broad consensus.
- The pair sticks to the positive ground in the upper-1.0800s.
- Focus now shifts to Lagarde’s usual press conference.
The shared currency remained apathetic after the ECB decision on Thursday, motivating EUR/USD to keep the orbit around the 1.0870 region.
EUR/USD muted on steady ECB
EUR/USD navigates the upper end of the weekly range after the ECB’s Governing Council left its monetary status quo unchanged at Thursday’s event, matching the previous expectations.
In fact, the ECB left intact the interest rate on the main refinancing operations, the interest rate on the marginal lending facility and the deposit facility at 0.00%, 0.25% and 0 -0.50%, respectively. The central bank also announced that the PEPP purchases will continue until at least end of 2020, while it introduced a New Pandemic Refinancing Operations for banks. Additionally, the ECB relaxed further the TLTRO conditions.
Looking ahead, attention should gyrate to President Christine Lagarde’s press conference and the subsequent Q&A session.
What to look for around EUR
The euro extends the recovery from recent lows and is now shifting its focus to the 1.0900 region. As always, developments from the coronavirus and its impact on the economy are expected to keep ruling the sentiment in the global markets for the time being, while optimism on a gradual re-start of the economic activity in some members of the bloc has given extra oxygen to the single currency as of late. On the more macro view, the euro is expected to remain under scrutiny in light of the predicted contraction of the bloc’s economy in the first half of the year, relegating hopes of a potential recovery to Q3 and/or Q4.
EUR/USD levels to watch
At the moment, the pair is gaining 0.02% at 1.0873 and a break above 1.0944 (55-day SMA) would target 1.0990 (weekly/monthly high Apr.15) en route to 1.1034 (200-day SMA). On the flip side, immediate contention is located at 1.0814 (78.6% Fibo of the 2017-2018 rally) seconded by 1.0727 (weekly low Apr.24) and finally 1.0635 (2020 low Mar.23).
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