EUR/USD Bounces Off MAs, After the ECB Monetary Policy Meeting Accounts
Skerdian Meta • 2 min read
EUR/USD seems to have turned bullish again, after the retreat in Q1 of this year. Last year this pair climbed around 15 cents to 1.2350s until the first week of January, but the decline in the USD stopped and it made some recovery.
But, in April the decline resumed again for the USD, which sent EUR/USD higher. This pair climbed to 1.2180s this week, but it retreated lower later and yesterday it was facing the 50 SMA (yellow) and the 100 SMA (green) on the H4 chart.
These moving averages were pierced briefly but held well as support, while today we are seeing a bounce after the European Central Bank ECB meeting minutes, which didn’t sound too dovish. In fact, the ECB sees risks for the economy as more balanced in the mid term, which is sort of hawkish.
So, EUR/USD has bounced off those moving averages as shown on the chart above and remains bullish now. Below are the meeting minutes form the ECB:
ECB releases the minutes of its April policy meeting
- Rate expectations remain well anchored by ECB guidance
- Optimism regarding global growth had also been the key driver of stock markets
- Sovereign yields and spreads had remained compressed
- Euro exchange rate had appreciated only slightly
- Incoming data also pointed to a continued recovery in global trade
- Short-term indicators pointed to a recovery starting in the second quarter of 2021
- Risks to the euro area growth outlook continued to be on the downside in the near term, but remained more balanced over the medium term
- It was important to highlight that calibrating purchases under PEPP so as to counter the adverse effects of the pandemic on the medium-term inflation outlook
- Full minutes