- EUR/USD reversed its direction after rising to 1.1830 area.
- ECB left its policy settings unchanged as expected, revised its guidance.
- USD regathered strength during the American trading hours.
After spending the first half of the day moving sideways in a tight range around 1.1800, the EUR/USD pair gained traction and climbed to a daily high of 1.1831 before reversing its direction. As of writing, the pair was losing 0.25% on a daily basis at 1.1763.
ECB's new guidance hints at dovish shift in outlook
As expected, the European Central Bank (ECB) left the interest rates on the main refinancing operations, the marginal lending facility and the deposit facility unchanged at 0.00%, 0.25% and -0.50%, respectively. In its policy statement, the ECB revised its forward guidance to note that it will allow a temporary overshoot of inflation before taking policy action.
Commenting on the ECB's policy statement and President Christine Lagarde's remarks, "promises made, promises kept – European Central Bank President Christine Lagarde has delivered a dovish policy shift, exceeding market expectations and defying hawkish members," said FXStreet analyst Yohay Elam. "That should keep EUR/USD depressed even if the dollar remains on the back foot."
ECB Quick Analysis: Three dovish changes hit EUR/USD, more could be in store.
In addition to the renewed EUR weakness, the USD's resilience caused EUR/USD to continue to push lower during the American session. With Wall Street's main indexes struggling to extend the two-day rally on Thursday, the US Dollar Index edged higher and was last seen posting small gains at 92.87.
The data from the US revealed on Thursday that the Initial Jobless Claims rose to 419,000 in the week ending July 17, compared to analysts' estimate of 350,000.
On Friday, the IHS Markit will release the preliminary Services and Manufacturing PMI report for the euro area, Germany and the US.
Technical levels to watch for
|Today last price||1.1763|
|Today Daily Change||-0.0031|
|Today Daily Change %||-0.26|
|Today daily open||1.1794|
|Previous Daily High||1.1805|
|Previous Daily Low||1.1752|
|Previous Weekly High||1.188|
|Previous Weekly Low||1.1772|
|Previous Monthly High||1.2254|
|Previous Monthly Low||1.1845|
|Daily Fibonacci 38.2%||1.1784|
|Daily Fibonacci 61.8%||1.1772|
|Daily Pivot Point S1||1.1762|
|Daily Pivot Point S2||1.1731|
|Daily Pivot Point S3||1.1709|
|Daily Pivot Point R1||1.1815|
|Daily Pivot Point R2||1.1836|
|Daily Pivot Point R3||1.1868|
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.