EUR/USD Current Price: 1.1987
- The ECB will increase the pace of bond-buying “significantly,” starting today.
- Lower US Treasury yields amid stimulus-related news weighed on the greenback.
- EUR/USD approaches 1.2000, could extend gains in the upcoming sessions.
The EUR/USD pair peaked for the day at 1.1989, its highest for the week, holding on to gains ahead of the Asian opening. The dollar eased alongside US government bond yields, which were affected by the approval of a $1.9 trillion stimulus bill in the US. Yields recovered some ground throughout the American afternoon, but the greenback maintained the sour tone and kept falling, as Wall Street up-roared.
The European Central Bank had a monetary policy meeting, and as widely anticipated, it maintained rates unchanged, alongside the size of PEPP. Policymakers announced that bond purchases over the next quarter to be conducted at a significantly higher pace than during the first months of this year. German bund yields fell on the headline, but EUR/USD hold on to the higher ground. Within her press conference, President Christine Lagarde said that the ECB is watching the exchange rate, adding that the central bank is ready to recalibrate its tools.
The US published Initial Jobless Claims, which resulted in 712K in the week ended March 5, better than anticipated. This Friday, Germany will publish the final reading of February inflation, while the EU will release January Industrial Production. The US will release the February Producer Price Index and the preliminary estimate of the March Michigan Consumer Sentiment Index, foreseen at 78.5 from 76.8 previously.
EUR/USD short-term technical outlook
The EUR/USD pair is trading above the 50% retracement of its November/January rally and could extend its gains once above the 1.2000 threshold. In the near-term, and according to the 4-hour chart, the risk is skewed to the upside, as the pair pressures daily highs while the 20 SMA gains bullish traction below the current level. The Momentum indicator resumed its advance within positive levels after correcting overbought conditions, while the RSI keeps advancing, currently around 63.
Support levels: 1.1970 1.1920 1.1885
Resistance levels: 1.2000 1.2045 1.2080
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