EUR/USD Price, News and Analysis:
- EUR/USD[1] bounces off 50-dma with another attempt expected soon.
- Thursday’s ECB meeting and press conference key to EURUSD direction.
DailyFX Economic Data and Events Calendar[2]
Thursday’s ECB policy meeting and press conference will likely play an important role in the future direction of the single currency although it may be talk rather than action that sets the tone. The central bank is expected to leave all policy levers untouched but they may indicate that they are unhappy with the current level of the Euro[3] which is dampening price pressures in the single-block. Recent comments from ECB chief economist Philip Lane that the EUR/USD[4] rate ‘does matter’ has seemingly drawn a 1.2000 line in the sand for the pair and this topside is likely to be respected by the market for now.
ECB President Christine Lagarde is likely to highlight that Euro strength is weighing on both growth and inflation outlooks and that the central bank is uncomfortable with the current level of the single currency to a certain degree. The more forcefully President Lagarde makes these comments, the more the Euro will fall, while a less dovish stance will allow the single currency to recoup some of its recent losses.
EUR/USD made a decisive break below the supportive 20-day moving average at the end of last week and is now pressing down on the 50-dma for the first time since late-May when the pair traded just below 1.0900. A break and open below the shorter-dated moving average opens the way to the 1.1696 – 1.1700 area before 1.1650 comes into play. Resistance is seen at 1.1848, off the 20-dma and a pair of short-term prior highs either side of 1.1866.
