EUR/USD Current price: 1.1342

  • Growth perspectives downwardly revised, inflation not in better shape.
  • EUR/USD nearing a daily ascendant trend line coming from the yearly low.

The ECB did as expected, maintaining rates unchanged and putting an end to quantitative easing. Not a minor twist to monetary policy, although these days, overshadowed by political jitters that took over the financial world. It's the end of an era, despite the European Central Bank has ratified that it will keep rates unchanged at least through the summer 2019, or as long as necessary "to ensure the continued sustained convergence of inflation to levels that are below, but close to 2.0% over the medium term." The central bank also announced it will enhance its forward guidance on reinvesting, intending to reinvest in full the securities purchased under the APP "for an extended period" that could past the date of rising rates. Quite a cautious approach that prevented the EUR from appreciating. The pair seesawed between gains and losses with the initial release unable to move far away from the pre-release level around 1.1370.

As Draghi begun speaking, the US released weekly unemployment claims, which decreased to 206K in the week ended December 7. The country also unveiled Import and Export Prices, sharply down in November and worse than expected. The ECB's head, in his initial remarks, stated that inflation is coming weaker than expected and reckoned the risks related to protectionism. The ECB downgraded its 2018 and 2019 growth forecasts, now at 1.9% for this year and at 1.7% for the next one. Inflation forecasts were revised slightly up for this year but downgraded for the upcoming one.

The EUR/USD pair fell with the downward revisions and Draghi stating that  the balance of risk is moving to the downside, trading now at daily lows in the 1.1340 price zone, bearish, according to the 4 hours chart, as the price is plummeting below the congestion of moving averages, with the 20 SMA gaining bearish traction leaning the scale to the downside. Technical indicators in the mentioned chart have turned south, entering bearish ground after consolidating around their midlines. A daily ascendant trend line coming from the yearly low is the immediate support around 1.1315, with bulls getting discouraged on a break below it.

Support levels: 1.1315 1.1280 1.1250

Resistance levels: 1.1375 1.1400 1.1435  

View Live chart for the EUR/USD


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD bouncing modestly on disappointing US Consumer Confidence

The shared currency remains pressured by the idea that the ECB will come out with massive stimulus measures in September. US Michigan Consumer Confidence down to 92.1 brakes dollar's gains.


GBP/USD retreats sharply after approaching 1.2200

The GBP/USD pair came under selling pressure after flirting with weekly highs, as a dismal US confidence report brought back risk-off. GBP/USD still up for the week and above the critical 1.2100 level.


USD/JPY: Greenback makes modest progress against Yen, near 106.30

The demand for Yen as a safe-haven currency has been weak in the last three days. The levels to beat for bulls are at the 106.30 and 106.55 resistances.


Four Signs of A Bear Market

I am a believer that the Universe gives you signs. That may sound a bit crazy, but these three charts are three more signs of a bear market. The top chart is the GLD exchange traded fund.

Read more

Gold gives back territory towards a 23.6% retracement

Gold prices were a touch lower by the end of the week, falling -0.68% having travelled between a high of $1,528.00 to a low of $1,503.87, ending the NY session around $1,513. 

Gold News