EUR/USD: ECB boosting appeal – OCBC
Euro (EUR) extended its move above 1.15-handle on broad US Dollar (USD) softness overnight (post-CPI) and ECB comments. EUR was last at 1.1552 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
Daily momentum is bullish
"Apart from Lagarde, other Governing Council members echoed views relating to ECB nearing the end of the easing cycle, after 200bps of cut via 8 meetings. Kazimir said 'As things stand now, ECB is nearly done, if not already at the end of the easing cycle'. Stournaras said that the bar for more rate cuts is high. He also added that the views among the Governing Council (difference between doves-hawks) 'have converged'."
"Lane said that latest reduction in borrowing costs will guard against inflation getting stuck below 2%. Moreover, Lagarde took opportunity yesterday to bump up the role EUR can play as a reserve currency. She said the further shifts may be underway in global currencies and that currency shift may boost euro’s international role."
"Elsewhere, progress on EU-US trade talks remains on the radar as the 9 Jul deadline draws closer. EU officials believe that this deadline may be extended. Daily momentum is bullish while RSI rose. Next resistance at 1.1570 levels, if broken may trigger 'buy-on-break' trades, with next resistance around 1.17 levels. Support at 1.1360 (21 DMA), 1.1305 (50 DMA)."
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FXStreet Insights Team
FXStreet
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