EUR/USD fell sharply; Thursday against the ECB meeting, the currency pair having retreated until’à a hollow at; 1.0631 yesterday evening, the lowest since March 17, compared to around 1.0730 just before the fall started.
Let us recall that the ECB carried out a price reduction. à what we can call a « dovish rate increase », since’it went up again’ its rates of 0.25%, while clearly signaling that this rate increase will be the last.
The « dovish rate hike » of the ECB causes the Euro Dollar to plunge, other key indicators to fall. watch this Friday
The President of the ECB, Christine Lagarde, has indeed declared: that “based on its current assessment, the Governing Council considers that the key interest rates of the ECB have reached levels which, if maintained for a sufficiently long period long term, will contribute substantially to the rapid return of inflation to the set objective.”
Future decisions by the Governing Council will ensure that the ECB's key interest rates are set at sufficiently restrictive levels for as long as necessary. The Governing Council will continue to follow a data-driven approach to determine the appropriate level and duration of restriction.”
In this context, EUR/USD plunged sharply, but for now appears to have halted its fall, at 1.0645 at the time of writing, with some better-than-expected Chinese data supporting the sentiment.
Indeed, industrial production has progressed; by 4.5% in August against 4% anticipated, while retail sales jumped by 4.6% against +3% forecast by the consensus.
>> Find All important statistics for EUR/USD and their results in real time in the Investing.com economic calendar!
For the rest of the day, we will expect inflation data in France and Italy during the morning, while in the United States, forex traders will monitor the inflation index. the New York Fed to 2:30 p.m., industrial production at 3:15 p.m., and the US consumer confidence index according to the University of Chicago. from Michigan to 4 p.m.
Technical thresholds at monitor on EUR/USD
From a graphical point of view, the Euro Dollar sent new bearish signals yesterday by breaking below the psychological threshold of 1.07 and below the previous major low dating from May 31 to 2019. 1.0635.
On the other hand, the EUR /USD seems to be starting to rise. rebound from the lower limit of a medium-term descending channel which has been stretching since the annual record in July.
A break of the Euro Dollar below 1.06 would confirm an exit from the bottom of this channel, which would constitute an additional bearish signal, putting the zone of the major psychological threshold of 1.05 in sight. Finally, the increase, the threshold of 1.07 will be the first potential obstacle to the increase; take into account.
EUR/USD collapses on dovish ECB rate hike, ahead of other data