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  • ECB left its key rates unchanged, matching the broad consensus.
  • The pair sticks to the positive ground in the mid-1.1800s.
  • Markets’ focus now shifts to Lagarde’s usual press conference.

The single currency sticks to the positive note after the ECB interest rate decision, motivating EUR/USD to keep business in the 1.1840 zone on Thursday.

EUR/USD stays bid following the ECB

EUR/USD is prolonging the upside momentum following Wednesday’s weekly lows near 1.1750 after the ECB’s Governing Council left its monetary status quo unchanged at Thursday’s event, in line with previous estimates.

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. In addition, the central bank kept the PEPP unchanged at €1.35 trillion. The ECB reiterated once again its readiness to use all of its instruments to push inflation towards the bank’s target. 

Looking ahead, attention should gyrate to President Christine Lagarde’s press conference and the subsequent Q&A session.

What to look for around EUR

EUR/USD managed to test the area just above 1.20 the figure at the beginning of the month. However, bulls failed to extend the rally further north, sparking a leg lower to the sub-1.18 instead. Looking at the broader picture, the bearish view on the dollar continues to sustain the underlying constructive bias in the pair, all accompanied by the improved sentiment in the risk-associated universe, auspicious results from domestic fundamentals – which have been in turn supporting further the view of a strong economic recovery following the coronavirus crisis – as well as a calmer US-China trade front. The solid positive stance in the speculative community also underpins the constructive outlook in the euro.

EUR/USD levels to watch

At the moment, the pair is gaining 0.25% at 1.1831 and a breakout of 1.2011 (2020 high Sep.1) would target 1.2032 (23.6% Fibo of the 2017-2018 rally) en route to 1.2413 (monthly high Apr.17 2018). On the flip side, immediate contention is located at 1.1751 (monthly low Sep.9) seconded by 1.1709 (38.2% Fibo of the 2017-2018 rally) and finally 1.1695 (monthly low Aug.3).