- EUR/USD rallies nearly 100 pips after ECB left interest rates unchanged.
- The ECB introduced new LTRO and raised bond purchases by 120 billion.
- The pair quickly reversed an early uptick to the 1.1300 round-figure mark.
The EUR/USD pair quickly reversed an early dip to the 1.1200 mark, or one-week lows and rallied nearly 100 pips post-ECB policy decision, albeit fizzled out rather quickly.
The shared currency attracted some dip-buying after the European Central Bank (ECB) decided to leave interest rates unchanged, contrary to broader market expectations of at least 10 bps cut.
Meanwhile, the ECB announced a new LTRO at 25 bps below the main refinancing operations to provide immediate liquidity and raised monthly bond purchases by 120 billion.
Given that deposit rate is already at record lows, at -0.5%, the ECB was short of options. Hence, the decision to leave interest rates unchanged might still not be seen as a big surprise.
This was evident from a sudden intraday turnaround from the 1.1300 neighbourhood, which has now dragged the pair back closer to the lower end of its daily trading range, or one-week lows.
Moving ahead, market participants now look forward to the latest staff projection. This will be followed by the post-meeting press conference, where comments by the ECB President Christine Lagarde will play a key role in influencing the near-term sentiment surrounding the common currency.
Technical levels to watch
|Today last price||1.1207|
|Today Daily Change||-0.0062|
|Today Daily Change %||-0.55|
|Today daily open||1.1269|
|Previous Daily High||1.1367|
|Previous Daily Low||1.1257|
|Previous Weekly High||1.1355|
|Previous Weekly Low||1.1027|
|Previous Monthly High||1.1089|
|Previous Monthly Low||1.0778|
|Daily Fibonacci 38.2%||1.1299|
|Daily Fibonacci 61.8%||1.1325|
|Daily Pivot Point S1||1.1229|
|Daily Pivot Point S2||1.1188|
|Daily Pivot Point S3||1.1119|
|Daily Pivot Point R1||1.1338|
|Daily Pivot Point R2||1.1407|
|Daily Pivot Point R3||1.1448|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.