ECB Rate Cuts No Longer An Option
On the heels of last week’s European Central Bank decision to keep rates at the current 0.75%, ECB President Mario Draghi noted that EU economic conditions had improved in recent months as sovereign default insurance and EU bond yields were “significantly lower” due to implemented ECB measures. The policymaker also noted that the region was likely to experience a recovery in the second half of the year, and that “there was no reason to change the medium term outlook for price stability”.
The sentiment was shared by all members on the governing board, with the vote to keep rates stable “unanimous”.
The comments have effectively erased any notion of a rate cut by the ECB, as growth is expected to return along with a stable price environment. Ultimately, the decision bodes well for the currency as it keeps rates higher in Europe, raising demand for the Euro against a lower yielding US dollar.
EURCHF Pullback
With Euro in demand, traders are beginning to unwind previously short EURCHF positions, allowing the cross pair to rocket higher above 1.2250 – the highest in more than a year. With European financial troubles seemingly stabilized, the Swiss franc safe haven trading is losing steam, allowing for additional Euro appreciation. The cross pair flow is supportive of the single currency in the near term, and will likely add to further EUR appreciation on a break of the next viable resistance barrier at 1.2318.
Technical Violation
Technical buying is adding to fundamental drivers on the session, allowing a further extension higher off of the break of the 1.3300 psychological barrier. The round figure remained a key barrier to any further upside in the major pair, previously failing to violate the level back in mid-December.
Now, with pivotal resistance at 1.3300 broken to the upside, the next resistance test for EURUSD will be the 1.3511 50% fib resistance barrier.
Recommended Content
Editors’ Picks
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.