EUR/USD picks up extra pace near 1.0750 post-ECB
09.06.2022, 12:14

EUR/USD picks up extra pace near 1.0750 post-ECB

  • EUR/USD advances on a firmer note to 1.0750.
  • ECB left its key rates unchanged, matching expectations.
  • Investors now look to Lagarde’s press conference.

The buying bias in the single currency gathers extra steam and lifts EUR/USD back to the 1.0750 region, or 3-day highs, in the wake of the ECB interest rate decision.

EUR/USD now focuses on Lagarde

EUR/USD now adds to the weekly recovery after 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.

In its statement, the ECB plans to end the net asset purchase under the APP in July and hike rates by 25 bps later in the same month. If the inflation outlook worsens, then a larger hike in September could be on the cards.

The ECB revised its macro projections and now sees headline inflation at 6.8% this year, 3.5% in 2023 and 2.1% in 2024. Regarding GDP, the bank sees the economy expanding 2.8% in 2022 and 2.1% in 2023.

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 0.20% at 1.0737 and faces the next hurdle at 1.0786 (monthly high May 30) seconded by 1.0933 (100-day SMA) and finally 1.0936 (weekly high April 21). On the downside, a breach of 1.0627 (monthly low June 1) would target 1.0532 (low May 20) en route to 1.0459 (low May 18).

 

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