ECB's firepower encourages EUR/USD to move toward stepping stone at 1.1350
|EUR/USD has risen to a high above 1.1270 at the time of writing, the highest since March and is ready to attack higher levels after the European Central Bank (ECB) exceeded expectations with a big boost to bond-buying, FXStreet’s analyst Yohay Elam reports.
See:
- ECB takes further steps, euro rises – Nordea
- ECB over-delivers, EUR/USD to jump above 1.13 on upbeat Lagarde speech – TDS
Key quotes
“The ECB has announced an increase of €600 billion to its Pandemic Emergency Purchase Program (PEPP), and it now reaches €1.35 trillion. That has exceeded most economists' expectations. In addition, the bank said it will reinvest proceeds from this program – maintaining a large balance sheet and similar to previous schemes.”
“The ECB extended the length of the PEPP to June 2021 – a year from now. The initial funds were projected to run out by the autumn. And while the bank promised flexibility, it refrained from junk bonds.”
“The daily chart is showing that the next resistance is at 1.1285, which was a high point early in the year. More importantly, 1.1350 was a stepping stone on the way down and it is followed by 1.1410 and 1.1490, the early March peak.”
“Support awaits at 1.1240, a high point in March, followed by 1.12 and 1.1150, the latter being April's peak.”
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