Euro wavers after ECB leave interest rates unchanged again
The euro was little changed against its major peers as traders reacted to the European Central Bank (ECB). As most analysts were expecting, the bank left the interest rate unchanged and maintained its quantitative easing program. The bank remained optimistic that its monetary policy response has helped to support the economy. That has been supported by recent upbeat economic data, including manufacturing and services PMIs and retail sales. Data released earlier today showed that car registrations in most countries rose in June.
The Australian dollar declined slightly as traders reacted to the rising number of coronavirus cases in the country. In a statement, health officials in the state of Victoria registered their worst number since the pandemic started. The state reported 317 new cases and 2 deaths. The number of cases also rose in the neighbouring Melbourne as the government brought in the military to help deal with the crisis. These numbers outweighed upbeat economic data from the country. The data showed that the economy added more than 210k jobs in June while the participation rate rose to 64%. In China, the economy bounced back by 3.2% in the second quarter.
The US dollar index gained slightly against major peers as traders reacted to the new initial jobless claims and retail sales numbers. According to the Bureau of Labour Statistics, more than 1.3 million Americans filed for initial jobless claims in the previous week. While the number is still high in historical standards, it is the lowest it has been since peaking at 6.8 million in March. The continuing claims declined to 17.3 million from the previous 18.6 million. Other data showed that retail sales in the US rose by 7.5% after rising by 17.7% in the previous month. Meanwhile, the manufacturing index rose to 24.1 from the previous 27.5.
The EUR/USD pair rose slightly after the ECB interest rate decision. The pair is trading at 1.1410, which is below this week’s high of 1.1450. On the four-hour chart, the price is above the 50-day and 100-day exponential moving averages. The signal line of the MACD has made a bearish crossover while the dots of the Parabolic SAR are above the price. Therefore, the pair is likely to remain within the current range as traders wait for the EU leaders meeting set for tomorrow.
The EUR/GBP pair too was little changed after the ECB decision and mixed jobs numbers from the United Kingdom. The pair is trading at 0.9087, which is a few pips below yesterday’s high of 0.9093. On the four-hour chart, the price is above the short and longer-term exponential moving averages. It is also slightly above the 23.6% Fibonacci retracement and above the Ichimoku cloud. Therefore, the pair is likely to continue rising, with the probable resistance being at 0.9114.
The AUD/NZD pair rose to an intraday high of 0.0673 in reaction to the upbeat jobs data from Australia and inflation numbers from New Zealand. On the four-hour chart, the pair is trading above the 100-day and 50-day EMAs while the RSI has moved below the overbought level. The pair has also formed a bullish pennant pattern, which is usually a sign that the price is likely to continue moving higher.