- The euro is barely down in choppy trading as financial markets remain closed.
- A dovish European Central Bank plummets the EUR/USD towards new YTD lows at 1.0757.
- The US Dollar Index to finish the week with gains of 0.68%.
- EUR/USD Price Forecast: A weekly close below 1.0806 might open the door toward 1.0636.
On Friday, the EUR/USD slides amidst a dull trading session due to Easter Friday. The common currency is trading at 1.0808, down some 0.18%, at the time of writing.
The euro fall continues after the European Central Bank (ECB) failed to deliver a hawkish tilt on Thursday’s monetary policy decision, which could have lifted the shared currency against its counterparts. Meanwhile, the US Dollar Index, a gauge of the greenback’s value vs. a basket of six currencies, is almost flat, though up 0.03%, at 100.507.
ECB kept rates unchanged and eyes to finish APP by Q3
On Thursday, the ECB unveiled its monetary policy decision, keeping rates intact, and announced the last three bond purchases of the Asset Purchasing Program (APP). The ECB said that the monthly net purchases under the APP would amount to €40 billion in April, €30 billion in May, and €20 billion in June.
EUR/USD traders perceived the monetary policy statement as dovish amid the lack of commitment towards a future tightening. The pair dipped towards 1.0757, a new YTD low, last seen in April 2020.
Mrs. Lagarde’s press conference did not give any hints regarding raising rates, though she emphasized that finishing the bond-buying program is required before rate increases. Christine Lagarde stated that risks to the inflation outlook are tilted to the upside in the near term and added that the APP is very “likely” to end in Q3. The ECB’s President stated that inflation is being driven by energy prices and has intensified across many sectors. She foresees that growth would have remained weak in Q1 2022.
In the meantime, an ECB survey reported that the Harmonised Index of Consumer Prices (HICP), the index for measuring inflation in the EU, is seen at 6% in 2022 and 2.4% in 2023. The same poll also reported expectations of growth. People surveyed forecast the Gross Domestic Product (GDP) to end at 2.9% in 2022, 2.3% in 2023, and 1.8% by 2024.
Also read:
- EUR/USD Forecast: What’s next after testing 1.0760?
- Lagarde: Inflation Oui, rate hikes Non, growth N’est-ce Pas
The Eurozone economic docket featured France and Italy’s inflationary figures for March. French inflation was aligned with the consensus, while Italy’s one showed that prices increased less than expected. Across the pond, US Industrial Production for March rose by 0.9%, higher than the 0.4%, while the New York Empire State Manufacturing Index jumped sharply to 24.6, smashing the 0.5 estimations.
EUR/USD Price Forecast: Technical outlook
The EUR/USD weekly chart depicts that the downtrend might extend further, though a close below 1.0806 might open the door towards March 2020 lows at 1.0636. That said, the EUR/USD first support would be 1.0757. A breach of the latter would expose April 2020 cycle low at 1.0727, followed by the 1.0636 aforementioned.
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.
Recommended content
Editors’ Picks
AUD/USD pressures as Fed officials hold firm on rate policy
The Australian Dollar is on the defensive against the US Dollar, as Friday’s Asian session commences. On Thursday, the antipodean clocked losses of 0.21% against its counterpart, driven by Fed officials emphasizing they’re in no rush to ease policy. The AUD/USD trades around 0.6419.
EUR/USD extends its downside below 1.0650 on hawkish Fed remarks
The EUR/USD extends its downside around 1.0640 after retreating from weekly peaks of 1.0690 on Friday during the early Asian session. The hawkish comments from Federal Reserve officials provide some support to the US Dollar.
Gold price edges higher on risk-off mood hawkish Fed signals
Gold prices advanced late in the North American session on Thursday, underpinned by heightened geopolitical risks involving Iran and Israel. Federal Reserve officials delivered hawkish messages, triggering a jump in US Treasury yields, which boosted the Greenback.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Is the Biden administration trying to destroy the Dollar?
Confidence in Western financial markets has already been shaken enough by the 20% devaluation of the dollar over the last few years. But now the European Commission wants to hand Ukraine $300 billion seized from Russia.