- EUR/USD remains firm and well above the 1.1800 mark.
- ECB left its key rates unchanged, as well anticipated.
- Attention now shifts to Lagarde’s usual press conference.
The upside momentum in the single currency stays intact on Thursday and now pushes EUR/USD to the area of fresh highs around 1.1840, where sits the 200-hour SMA, following the ECB’s interest rate decision.
EUR/USD now looks to Lagarde
EUR/USD navigates the 1.1830/40 band after the ECB’s Governing Council left its monetary status quo on hold at Thursday’s event, matching the previous expectations.
In fact, the ECB left intact the interest rate on the main refinancing operations, the interest rate on the marginal lending facility and the deposit facility at 0.00%, 0.25% and 0 -0.50%, respectively.
The central bank slowed the pace of purchases under the PEEP and reiterates it will run until at least end of March 2022. Furthermore, purchases under the APP remain unchanged at €20B and are seen running until shortly before the bank hikes the policy rate.
The ECB once again reiterated that rates would remain at present/lower levels until the inflation target is in sight, while it remains ready to adjust tools in order to achieve the 2% goal. The bank’s statement also said that inflation could overshoot the target for a period of time, although the nature of higher inflation is still seen as transitory.
Moving forward, market participants will now closely follow the usual press conference by Chairwoman Lagarde and the subsequent Q&A session.
EUR/USD levels to watch
So far, spot is gaining 0.22% at 1.1838 and faces the next up barrier at 1.1909 (monthly high Sep.3) followed by 1.1943 (100-day SMA) and finally 1.2000 (psychological level). On the other hand, a break below 1.1802 (weekly low Sep.8) would target 1.1786 (20-day SMA) en route to 1.1663 (2021 low Aug.20).
