Here are our Top 10 Takeaways for the ECB Rate Decision and their implications for the euro
1. ECB Leaves Rates Unchanged at 0.25% - EUR Neutral
2. Reiterates pledge to keep rates at present or lower level for extended period of time - EUR Neutral
3. Repeats warning that ECB stands ready to take decisive action if needed - EUR Neutral
4. ECB Upgrades 2014 GDP growth to 1.2% from 1.1%, expects 1.8% in 2016- EUR Positive
5. Risks to economic outlook to downside (including EM and geopolitical uncertainty) - EUR Negative
6. ECB sees news in past 4 weeks largely on positive side - EUR Positive
7. ECB Cuts 2014 Inflation forecast to 1% from 1.1%, expects CPI at 1.7% in Q4 of 2016 - EUR Negative
8. Money market conditions normalized further- EUR Positive
9. Saw no reason to halt SMP Sterilization - EUR Positive
10. EUR rate not a policy target but important for growth and inflation - EUR Neutral
The move in the EUR/USD today takes the currency pair above a very important long term Fibonacci resistance level at 1.3835/40. At the time that this article is published, EUR/USD is still in the midst of testing this key level. A sustained break above this resistance would open the door for a move up to the 2 year high of 1.3893.
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