EUR/USD holds on near daily highs post-ECB minutes

  • EUR/USD remains parked in the 1.1270/80 band.
  • ECB minutes showed the bank is ready to ease conditions.
  • US CPI figures next on the calendar.

The shared currency keeps the buying bias unchanged so far today and is now taking EUR/USD to the 1.1270/80 band ahead of key releases across the pond.

EUR/USD apathetic on ECB minutes

Spot kept the composure after the ECB minutes from the last meeting showed the Governing Council is ready to ease policy further in light of declining inflation expectations and the ongoing slowdown in the bloc.

The pair has managed to gain around a cent since weekly lows in the 1.1180 region (Tuesday) after remarks from Fed’s Powell and the FOMC minutes came in on a more dovish tone than initially expected.

Data wise today, German final CPI for the month of June noted prices rose 0.3% inter-month and 1.6% on a yearly basis, matching the preliminary readings. Later today, all eyes will be upon the publication of inflation figures in the US economy during last month.

What to look for around EUR

The shared currency is breathing some relief after the dovish tone from Fed’s Powell and the FOMC minutes. However, this is seen as a short-live boost against the backdrop of renewed and increasing speculations of another wave of monetary stimulus from the European Central Bank in the near term, via interest rate cuts (September?) and the resumption of the QE programme. Also weighing on the currency, the dovish stance from the ECB appears reinforced by the recent appointment of ex-IMF’s C.Lagarde to succeed M.Draghi. On the macro scenario, the slowdown in the region looks unremitting and it also reinforces the current accommodative attitude of the central bank.

EUR/USD levels to watch

At the moment, the pair is gaining 0.21% at 1.1273 and a break above 1.1283 (21-day SMA) would target 1.1325 (200-day SMA) en route to 1.1412 (high Jun.25). On the other hand, the next down barrier lines up at 1.1193 (monthly low Jul.9) followed by 1.1181 (low Jun.18) and finally 1.1106 (2019 low May 23).

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