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EUR/USD Declines Ahead Of ECB Interest Rates Decision

EUR/USD Declines Ahead Of ECB Interest Rates Decision

EUR/USD Declines Ahead of ECB Interest Rates Decision


EUR/USD extended bearish momentum for the fourth consecutive session this week after a significant peek on Monday with a March-fresh-highs 1.0636. The pair had to abandon the high levels, with a weekly low record at 1.0536, submitting to stronger US Dollar as US index continues to soar all competing rivals with a new high record for this week at 102.24.

Markets are awaiting ECB interest rates decision today and forecasts are high that ECB will leave rates at current 0.0%. The Eurozone is the first of the major economies to release inflation data for February, and it rose to 2.0%y/y, now essentially on target (The ECB aims at inflation rates of below, but close to, 2% over the medium term). Mr. Draghi will hold a press conference shortly after rates decision where he will discuss current EU monetary policy and global economy.

Despite the need for a continued accommodative monetary policy stance, the ECB is facing some challenges related to its QE purchases. Partly as a result of the ECB’s purchase patterns there has been a fall in short-end German yields at the beginning of this year, where the ECB has allowed itself to buy bonds yielding below the deposit rate. Regarding the future ECB QE purchases, the latest communication from the ECB shows it is very reluctant to allow a change to the 33% issue/issuer limit due to both legal and price formation issues. ( Danske Research Team ).

Fundamentals :

1- EUR- ECB interest rate decision at 12:45 PM GMT.

2- EUR- Draghi speech at 1:30 PM GMT.

3- USD- Unemployment claims at 1:30 PM GMT.

Technical :

Trend : Bearish Sideways

Daily Pp 1.0550

Resistance levels : R1 1.0573 , R2 1.0608 , R3 1.0646

Support levels : S1 1.0522, S2 1.0480, S3 1.0428

Remark : ECB interest rates are highly to be left unchanged but the main focus will be on Draghi’s speech. Also US data today is vital for US Dollar levels, not to be missed.

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

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