EUR/USD Remains Supported by MAs, Despite the ECB Pledging to Keep the Cash Flowing
The Eurozone economy has been improving considerably in the last few months, as the continent reopened from the winter restrictions. Services finally came out of the second recession while manufacturing is surging higher.
Inflation is growing, but it’s way behind the US and it remains well below 2% which is the ECB target. The ECB has given some hawkish signs in recent weeks, as the economy improved, helping to keep EUR/USD bullish, but today’s ECB board member Panetta reversed the rhetoric, commenting on keeping the PEPP purchases going and playing down inflation.
EUR/USD has retreated to the 20 SMA (gray) on the H4 chart, but the trend remains bullish and this pullback might be a good opportunity to buy this pair. since the stochastic indicator is becoming oversold.
Remarks by ECB board member, Fabio Panetta, in an interview
- Does not see signs that inflation path is shifting upwards
- The risk of providing too little stimulus is high
- It is premature to withdraw stimulus measures
- The conditions today do not justify reducing pace of PEPP purchases
- A discussion about phasing out PEPP is clearly premature
- We are now seeing an undesirable increase in yields
Those are some heavy words by Panetta. It seems like there has been a bit of a change in attitude by the ECB as of late. They were quite comfortable to talk about tapering a few weeks ago but now it is all about saying that they aren’t comfortable with reducing the pace of PEPP purchases. Even Panetta’s remark on yields strikes a contrast to what we heard last week
Top 4 Brokers
