Talking Points:
- Earlier today, ECB Chief Economist Peter Praet suggested that the Governing Council would discuss the timetable for ending the QE program at their June rate decision next week.
- Both EUR/USD[1] and GBP/USD[2] have traded through their respective daily 13-EMAs, which neither had traded above since April 18.
- Sentiment for the US Dollar[3] remains mixed after the pullback over the past week.
For longer-term technical and fundamental analysis, and to view DailyFX analysts’ top trading ideas for 2018, check out the DailyFX Trading Guides[4] page.
The US Dollar (via the DXY[5] Index) is working on its third consecutive day lower and five days out of six overall as a culmination of factors has undercut the greenback in the near-term. At the end of last week, the first negative catalyst for the DXY Index was the announcement that the US would engage Canada, Mexico, and the EU, as the imposition of tariffs has historically been a negative development[6] for the US Dollar.
Today, the next negative catalyst for the DXY Index isn't USD-centric but rather one that impacts its largest constituent, the Euro[7]. The near-term bullish outlook for the Euro[8] was bolstered today when ECB Chief Economist Peter Praet suggested that the Governing Council would discuss the timetable for ending the QE program at their June rate decision next week.
Currently, the ECB is on pace to run its asset purchase program at a pace of €30 billion per month through September 2018. The commentary made today would suggest that the ECB will either announce or lay the groundwork to announce that
