EUR/USD Unchanged After the ECB Meeting – What Next?

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Written By: Mircea Vasiu
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    Summary:
  • EUR/USD unphased by the ECB meeting. The central bank leaves the monetary policy accommodative despite an upbeat economic outlook.

The ECB meeting failed to bring the much-awaited volatility in the euro pairs. The EUR/USD seen here traded in a very tight range for over a month now – about a hundred pips or so. Every attempt at the downside was met with heavy buying, and that is exactly what happened yesterday during and after the ECB meeting.

The ECB decided to leave the monetary policy unchanged – both the interest rate level and the PEPP purchases. However, it increased its growth outlook for the Euro area economies, both for the current and the next year.

Because of that, the euro was supported on dips, even though it is hard to find any hawkish outcome from the ECB meeting, considering that its staff projections show inflation at only 1.4% by 2023. We should all remember that the main driver for the ECB monetary policy should be its mandate’s fulfillment – to bring inflation below but close to 2%.

Besides leaving the PEPP program unchanged for now, the feeling persists that the ECB is getting ready to taper by the end of the summer. This is what keeps a bid tone behind the euro, and the unknown regarding what the Fed will do next.

EUR/USD Technical Analysis

Bears may want to wait for a break and close below 1.21 below, going short with 1.2250 stop and a target at 1.1850 and beyond.

EUR/USD Price Forecast

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Written By: Mircea Vasiu

Mircea, MBA in International Business graduating Magna Cum Laudae, trades for a living and contributes to various financial publications for more than six years. He writes about macroeconomics, stock indices, currencies, and most recently ETFs and individual stocks. For the past decade, he’s involved in everything trading related, mostly in the currency market, both with manual and algorithmic trading.

Published by
Written By: Mircea Vasiu