ECBs Wunsch speaking at a Reuters global markets forum says:
- Whether we need to do more or not is a very difficult question.
- Have greater confidence that projections can be used as an anchor
- May have reached a peak in wages, but that’s still uncertain.
- Can’t conclude yet that we’ve reached terminal rate
- I’m fine with reaching inflation target only in 2025
- Can’t exclude a recession, but not the base case
- Does not see APP sales for now
- PEPP reinvestments could and earlier than end of 2024
- There aren’t arguments to keep PEPP reinvestments until end of 2024
- Would be cautious about raising mandatory reserve requirements.
The ECB raise rates by 25 basis points last week, but signal they may have reached a pause level.
The EURUSD fell sharply on the rate decision but then rebounded into the Fed decision yesterday. The dollar buying sent the pair sharply to the downside. In trading today a new low was made at 1.0616 which tested the 38.2% retracement of the move up from the 2022 low at 1.0610. Buyers leaned against that level and pushed the price back up toward 1.0663. That rise stayed below the 100-hour moving average currently at 1.0674.
The current price is trading at 1.0659. There is another support at 1.0632 area (the low price from last week, and the low price going back to the end of May bottomed in that area). Watch the 1.0632 area for close intraday support. Stay above is more bullish with the 100 hour moving average 1.0674 is a key target. Moving below would have traders eyeing the 1.0610 area again.
This article was written by Greg Michalowski at www.forexlive.com. Source