EURUSD higher for the 6th day in the last 8 trading days

The ECB’s Lagarde threw in the towel yesterday saying that rates should return to 0.0% by the end of the 3rd quarter. There are caveats of course. Economies are still fragile and, as Justin points out, central banks are fighting a fire (inflation) that is fueled by factors beyond the control of the respective central banks. It’s a problem and, as Lagarde puts it, “complicated” because of negative supply shocks.

Lagarde’s comments from yesterday are below:

  • I expect the APP to end very early in the third quarter
  • This would allow a rate hike to take place in July, in line with forward guidance
  • Yes inflation stabilizes around 2% in the medium term, a further gradual normalization towards the neutral rate will be appropriate
  • But the overall pace and magnitude of adjustment cannot be determined ex ante
  • The current situation is complicated by the presence of negative supply shocks
  • There are arguments for progressivity, optionality and flexibility when adjusting monetary policy
  • We have an important benchmark for policy, which is to achieve 2% inflation over the medium term
  • The ECB will take all necessary measures to do so
EURUSD higher on the day

the EURUSD

EUR/USD

The EUR/USD is the currency pair comprising the single currency of the European Union, the euro (symbol €, code EUR), and the dollar of the United States (symbol $, code USD). The pair rate indicates how many euros are needed to buy a dollar. For example, when EUR/USD is trading at 1.2, it means that 1 euro equals 1.2 dollars. Why EUR/USD is the most popular trading pairCompared to all tradable currencies, the Euro (EUR) is the second most traded currency in the world, behind the US Dollar. This currency pair is the most traded and liquid currency pair in the market. As the most popular trading pair, EUR/USD is a staple of all brokerage offerings and often has some of the lowest spreads compared to other pairs. Ultimately, the currency trails the two most economical blocs in the world and sees the most volume for this reason. EUR/USD has a wide range of factors that influence its rates. On the Euro side, Eurozone economic data as well as internal bloc factors can easily impact rates. Even smaller member states can effectively weigh on the euro, as seen in Greece during bailout talks in the 2010s. Alternatively, developments in the United States and at the Federal Reserve generally affect the EUR/ usd. Many examples include bailouts during the financial crisis, tax cuts under the Trump administration, and Covid-19 relief measures, among others.

The EUR/USD is the currency pair comprising the single currency of the European Union, the euro (symbol €, code EUR), and the dollar of the United States (symbol $, code USD). The pair rate indicates how many euros are needed to buy a dollar. For example, when EUR/USD is trading at 1.2, it means that 1 euro equals 1.2 dollars. Why EUR/USD is the most popular trading pairCompared to all tradable currencies, the Euro (EUR) is the second most traded currency in the world, behind the US Dollar. This currency pair is the most traded and liquid currency pair in the market. As the most popular trading pair, EUR/USD is a staple of all brokerage offerings and often has some of the lowest spreads compared to other pairs. Ultimately, the currency trails the two most economical blocs in the world and sees the most volume for this reason. EUR/USD has a wide range of factors that influence its rates. On the Euro side, Eurozone economic data as well as internal bloc factors can easily impact rates. Even smaller member states can effectively weigh on the euro, as seen in Greece during bailout talks in the 2010s. Alternatively, developments in the United States and at the Federal Reserve generally affect the EUR/ usd. Many examples include bailouts during the financial crisis, tax cuts under the Trump administration, and Covid-19 relief measures, among others.
Read this term today continued the upward movement. This rise pushed the price higher for the 6th of 8 trading days since the May 13 low at 1.03485. The price reached 1.07353 today (up 387 pips from the low).

This move higher today has taken the price above the 61.8% retracement of the move lower from the April 21 high at 1.07113.

However, price increases have slowed. The price has consolidated over the last 7 hours of trading between 1.0695 and 1.0735. It should be noted that the low price has stalled near yesterday’s high at 1.0696.

This area of ​​1.0695 is now a close risk level in the short term. Staying above would be more positive/bullish, moving below and there could be some disappointment from the failure of the breakout higher. Traders may look towards the 1.06421 level on more bearish momentum.

On the upside, a break of the high price would cause traders to look towards the 1.0757 area. This level corresponds to the lows of April 14, April 19 and a high of April 25. Above this level, the price enters a top-down consolidation zone that peaked at the April 21 high at 1.09356.

Garland K. Long