EURUSD on Sharp Bearish Decline As Interest Rate Remains Unchanged Post ECB Policy Meet
EURUSD has maintained a steady bearish decline across this week’s trading session. The pair saw a sharp decline post announcement from much awaited ECB policy meet where they kept the interest rate and view on current economy unchanged in line with popular expectations. The tone of the press conference and Q&A was of caution and concern over the recent moderation in activity despite their continued confidence in achieving their targets.
EURUSD Breaks Lows
President Draghi repeated ECB’s patient, prudent and persistent policy stance and stated that the Governing Council did not discuss their June meeting or levels of FX. EUR/USD probed as high as 1.2210 after the brief statement was released but fell sharply in response to Draghi’s press conference, reaching 1.2096, a low since 12 January. The ECB is eager not to steer any new EUR direction amid cyclical weakness and trade uncertainty.
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The first release of US GDP for Q1 2018 is a top-tier market mover that has a considerable impact on the EUR/USD. The US economy has likely slowed down in the first quarter of the year, as it often happens. An annualized growth rate of 2.3% is projected after 2.9% in Q4 2017 and levels above 3% in Q2 and Q3. The data feeds into the Fed’s decision making. Some Analysts predict the results provide trading opportunities in both upside and downside surprises on this event.
While this news is expected to cause quite a stir in today’s market as trading closes for the week, many investors await personal income and personal spending data reading to be released on Monday as US dollar continues to grow stronger across the week. The next level to watch is $1.2090, which was the peak in 2017. Further below, the round psychological level of $1.2000 is a significant barrier. Even lower, $1.1920 was a swing low before the pair shot higher early this year. On the topside, the March 1st low of $1.2155 is now resistance, followed by $1.2210 and $1.2240 as both were lows in recent weeks.