EUR/USD recedes to 1.1040 post-ECB, now looks at Lagarde
- EUR/USD keeps the trade within the daily range near 1.1040.
- ECB matched consensus and raised rates by 25 bps.
- Investors now shift their attention to Lagarde’s press conference.
Some disappointment emerges after the ECB’s interest rate decision and relegates EUR/USD to trade around the 1.1050/40 band on Thursday.
EUR/USD shifts the focus to Lagarde
EUR/USD maintains the inconclusive bias after the well-anticipated rate hike by the ECB.
Indeed, the central bank raised the interest rate on the main refinancing operations, the interest rate on the marginal lending facility and the deposit facility to 3.75%, 4.00% and 3.25%, respectively.
The ECB stressed that underlying inflation remains strong despite the loss of momentum seen in past months. In addition, the lags and strength of transmission of past rate raises to the real economy remain uncertain.
The ECB also noted that future decisions will make rates sufficiently restrictive.
Moving forward, market participants will now closely follow the usual press conference by Chairwoman Lagarde and the subsequent Q&A session.
EUR/USD levels to watch
So far, the pair is down 0.17% at 1.1040 and faces the next support at 1.0941 (monthly low May 2) followed by 1.0909 (weekly low April 17) and finally 1.0831 (monthly low April 10). On the other hand, the surpass of 1.1095 (2023 high April 26) would target 1.1100 (round level) en route to 1.1184 (weekly high March 21 2022).