- The USD languished near multi-week lows and assisted EUR/USD to gain some traction on Thursday.
- The ECB left its monetary policy settings unchanged and did little to provide any impetus to the pair.
The EUR/USD pair held on to its intraday gains around mid-1.2000s and moved little after the ECB announced its monetary policy decision.
Following a brief consolidation through the early European session, the pair regained some positive traction on Thursday and built on the overnight bounce from the key 1.2000 psychological mark. The US dollar remained depressed near multi-week lows amid expectations that the Fed will keep rates low for a longer period. This, in turn, was seen as a key factor that provided a modest lift to the EUR/USD pair.
Meanwhile, the shared currency had a rather muted reaction to the European Central Bank (ECB) decision to leave its monetary policy settings unchanged. This was widely anticipated by market participants. This, coupled with the fact that updated economic projections will only not be released until June, failed to provide any meaningful impetus to the EUR/USD pair, turning the meeting a non-event for the market.
However, minutes from the March meeting indicated that there could be rigorous debate over the future of the PEPP. Hence, the key focus will be on the post-meeting press conference, where comments by the ECB President Christine Lagarde might infuse some volatility around the shared currency. Apart from this, the usual Initial Weekly Jobless Claims data from the US might influence the USD and produce some meaningful trading opportunities.
Technical levels to watch