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#1 12-12-2019 16:06:31

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EUR/USD: pair briefly rose after ECB meeting but fell back down...

EUR/USD: the pair briefly climbed after ECB meeting but fell back down after Trump tweet suggested imminent agreement with China

The ECB meeting and the press conference of newly appointed President Christine Lagarde caused a slight increase in volatility on the pair, but this ultimately had no impact on the overall trend.

It should be noted, however, that the euro has made progress in response to Lagarde's initial remarks, which referred to "initial signs of stabilisation of the slowdown in growth".

However, her other comments were more moderate, which did not sustain the rise of the single currency, Lagarde also stated that "incoming data indicates that inflationary pressures remain moderate" and that "a very accommodating policy is still needed".

Growth and inflation forecasts were also updated, but minor changes didn't impact the markets either, as some downward revisions were offset by upward revisions.

From a technical point of view, it should be noted that the eurodollar pair touched its 200-day moving average (1.1153) for the first time since the beginning of July at the opening of Lagarde's speech, before giving back its gains.

Trump then quickly took over by strengthening the dollar via a tweet stating that it is "very close to a big deal with China", statements that were supported by Wall Street Journal rumours that US negotiators had proposed to China to reduce tariffs on $360 billion worth of Chinese imports by 50% in exchange for firm Beijing commitments on purchases of US agricultural products.

In the end, there is no real impact on the general trend. Moreover, even if this psychological threshold of 1.11 is tested, the chances of continuing the increase can be considered intact as long as the 100-day moving average (1.1065) is maintained.

Lastly, it should be noted that from the point of view of the economic calendar, the week will end with the publication of the November US retail sales, which will be the next potential catalyst for the evolution of the EUR/USD pair.

Hourly EUR/USD chart

"Anything worth having is worth going for - all the way." - J.R. Ewing



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