EUR/CAD drops to weekly lows near 1.52 despite ECB's tapering announcement

EUR/CAD loses around 100 pips after ECB announcement.
ECB will continue €30 billion APP until September and will taper it down to €15 billion.

Eren Sengezer FXStreet

The shared currency came under a heavy selling pressure after the ECB published its monetary policy statement and the EUR/CAD pair fell sharply to its lowest level since June 8 at 1.5205. As of writing, the pair was trading at 1.5215, losing 0.65% on the day.

Although the knee-jerk reaction to the ECB's decision lifted the pair to a fresh daily high of 1.5360, it didn't take long before investors showed their disappointment.

"The Governing Council will continue to make net purchases under the asset purchase programme (APP) at the current monthly pace of €30 billion until the end of September 2018. The monthly pace of the net asset purchases will be reduced to €15 billion until the end of December 2018 and that net purchases will then end," the ECB said.

Regarding the interest rates, the ECB didn't make any changes to the main refinancing operations, the marginal lending facility, and the deposit facility and kept them steady at 0.00%, 0.25% and -0.40% respectively.

Now markets' attention shifts to the ECB president Mario Draghi's press conference, which is scheduled to start at 12:30 GMT.

Technical levels to consider

1.52 (Jun. 8 low/psychological level) is now the next support for the pair ahead of 1.5125 (Jun. 6 low) and 1.5080 (Jun. 1 low). On the upside, resistances align at 1.53 (psychological level), 1.5360 (daily high) and 1.5440 (May 8 high).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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