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EUR/USD recovers from ECB losses and rises to 1.1370

The EUR/USD pair erased the losses the followed the ECB decision and Draghi’s press conference. It rose back above 1.1650 and recently reached 1.1370. As of writing, trades at 1.1365, marginally lower for the day. 

The euro tested earlier today the 1.1400 area but failed to break higher and then weakened after the ECB meeting. It bottomed at 1.1330 and then bounced back to 1.1360. 

The European Central Bank kept rates unchanged and announced an end to the asset purchase program. “The decision was widely expected, but we find great interest in the fact that the ECB now ties the reinvestment period up to the first rate hike – and that the notion of the next step is a hike from the ECB, which would be a hawkish signal. Somewhat downbeat and hopeful message on growth, inflation, and wages. Markets generally traded within a narrow band, and today’s meeting does not alter our expectation of the ECB hiking rates in December 2019”, said analysts at Danske Bank.

The greenback posted mix results across the board. It gained versus the yen supported by higher US yields and fell modestly versus commodity currencies. On Friday, the retail sales report is due. 

EUR/USD Levels to watch 

To the downside, the key support levels are seen at 1.1330 followed by 1.1300/05 and 1.1275. On the upside, resistance now might be located at 1.1400 (Dec 11 high), followed by 1.1425 and the relevant 1.1445.
 

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