EUR/USD drops to session low, below mid-1.1300s on Draghi’s dovish shift

• ECB’s downward revision of growth/inflation forecasts prompts some selling.
• Draghi turns dovish and said that the balance of risk is moving to the downside.

As the post-ECB meeting press conference got underway, the EUR/USD pair met with some fresh supply and has now drifted into negative territory.

The shared currency started losing ground after the ECB President Mario Draghi said that the incoming inflation data has been weaker than expected and significant monetary policy stimulus is still required.

Draghi was further noted saying that the latest data suggests slower growth momentum and the balance of risk is moving to the downside, resulting in a downward revision of 2018/19 growth and inflation forecasts.

The central bank lowered its growth projections for 2018 to 1.9% vs +2.0% previous and 1.7% for 2019 vs +1.8% prior. Meanwhile, the yearly inflation rate for 2018 was revised higher to 1.8% from 1.7% previous but was largely offset by a weaker outlook for 2019, now seen at 1.6% vs. 1.7% prior.

The pair quickly lost around 40-pips and slipped below mid-1.1300s in a knee-jerk reaction to the dovish outlook, though downside remains limited amid the latest optimism over Italian budget compromise.

Technical levels to watch

EUR/USD

Overview:
    Today Last Price: 1.1346
    Today Daily change: -25 pips
    Today Daily change %: -0.220%
    Today Daily Open: 1.1371
Trends:
    Previous Daily SMA20: 1.1364
    Previous Daily SMA50: 1.1407
    Previous Daily SMA100: 1.1504
    Previous Daily SMA200: 1.1728
Levels:
    Previous Daily High: 1.1388
    Previous Daily Low: 1.1314
    Previous Weekly High: 1.1424
    Previous Weekly Low: 1.1311
    Previous Monthly High: 1.15
    Previous Monthly Low: 1.1216
    Previous Daily Fibonacci 38.2%: 1.136
    Previous Daily Fibonacci 61.8%: 1.1342
    Previous Daily Pivot Point S1: 1.1328
    Previous Daily Pivot Point S2: 1.1285
    Previous Daily Pivot Point S3: 1.1255
    Previous Daily Pivot Point R1: 1.1401
    Previous Daily Pivot Point R2: 1.1431
    Previous Daily Pivot Point R3: 1.1474

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