- Euro extends gains across the board after the ECB meeting.
- US dollar resumes slide after short-live recovery.
The EUR/USD pair broke higher and jumped to 1.1362, reaching the highest level since March 11. From the top, pulled back and as of writing it is trading at 1.1315, up 90 pips for the day, on its way to the eight consecutive daily gain.
ECB and a weak USD boost EUR/USD
The euro is among the top performers on Thursday following the policy meeting of the European Central Bank. The ECB delivered in line with expectations by keeping rates unchanged and increasing the emergency purchase program by 600 billion euros to 1,350 billion and extend it to June 2021.
“We now have more ECB easing but a stronger EUR. In our view, this is arguably so as these actions indeed cap macroeconomic tail risks. Thus, the decline in uncertainty becomes a propellant of FX strength”, explained analysts at Danske Bank.
The stronger euro boosted EUR/USD that also received an impulse from a decline of the US dollar. After a short-lived recovery, the DXY resumed the decline, falling below 97.00 for the first time since early March.
Not even higher US yields are helping the US dollar. The ongoing rally in Wall Street keeps safe-haven assets under pressure, including the dollar. The Dow Jones is marginally higher and it hit the fresh monthly highs.
Technical levels
The EUR/USD holds a positive tone with technical indicators signalling extreme overbought reading but so far correction indications. The area around 1.1345/50 is a relevant technical level, and a consolidation above would clear the way to more gains. On the flip side, now 1.1290 is the immediate support followed by 1.1255.
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