EUR/USD erases ECB-inspired gains, closes in on 1.1100

The EUR/USD pair climbed to its highest level since early November at 1.1154 during the European trading hours but failed to preserve its momentum amid broad-based USD strength. As of writing, the pair was trading at 1.1112, erasing 0.15% on a daily basis.

Euro gained traction during Lagarde's presser

In a widely expected decision on Thursday, the European Central Bank (ECB) announced that it left the interest rates on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility unchanged at 0.00%, 0.25% and -0.50%, respectively.

During her first press conference, ECB President Lagarde noted that the ECB has revised its 2019 growth expectation to 1.2% from 1.1%. Lagarde refrained from commenting on the possibility of a change in the monetary policy and helped the shared currency gather strength against its rivals. 

Assessing Lagarde's remarks, "as regards the short-term outlook for monetary policy, further easing seems to be off the table, at least with the current macro projections, and wait-and-see looks the way forward," noted IND analysts. "Today, at least we had the impression that it was not always clear whether Lagarde spoke on behalf of herself or on behalf of – at least the majority of – the ECB’s Governing Council."

On the other hand, revived hopes of the US and China coming to terms on trade to delay the December 15 tariff hike provided a boost to the market sentiment. Supported by a more-than-5% increase in the yield of the 10-year US Treasury bond yield, the US Dollar Index staged a decisive rebound and put the pair under bearish pressure. At the moment, the index is up 0.2% on the day at 97.38.

Technical levels to watch for