EUR/USD closer to 1.1700 on Draghi, softer US CPI

The pair leaps to the 1.1680 area, fresh monthly tops.
Further selling pressure keeps hurting the greenback post-CPI.
ECB leaves inflation forecasts unchanged, lowers 2018/19 GDP estimates.

Pablo Piovano FXStreet

The bid tone around the European currency is now gathering further traction, lifting EUR/USD to the boundaries of 1.1680, or fresh monthly peaks.

EUR/USD bid on Draghi, weaker USD

Spot navigates fresh tops for the current month boosted by a sharp pick up in the selling pressure around the greenback post-CPI results. The disappointing results from US inflation figures forced yields of the US 10-tear benchmark to tumble to fresh lows in the 2.95% neighbourhood.

The shared currency also derive some buying interest after President Draghi disappointed EUR-bears today at the ECB meeting, where the central bank left unchanged its monetary conditions.

At his press conference, Draghi noted that uncertainty surrounding underlying inflation appears mitigated, while he stressed that updated forecasts on inflation and economic growth confirm the central bank’s assessment.

The ECB now sees inflation running at an annualized 1.7% for the current month, 2019 and 2010, unchanged from the previous report. However, the ECB revised lower its forecasts for GDP for 2018 and 2019 and now expects the economy to expand 2.0% and 1.8%, respectively.

Spot is now advancing since Monday, leaving behind the key resistance area at 1.1650/60 and is now once again targeting the more significant barrier at the 1.1745/50 band.

EUR/USD levels to watch

At the moment, the pair is up 0.42% at 1.1675 facing the next barrier at 1.1734 (high Aug.28) ahead of 1.1745 (high Jul.31) and finally 1.1792 (high Jul.9). On the downside, a break below 1.1508 (low May 29) would target 1.1449 (50% Fibo of the 2017-2018 up move) en route to 1.1299 (2018 low Aug.15).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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