EUR/USD Tentatively Tests Support Ahead of ECB Meeting
Updated
Following hotter-than-expected US CPI inflation numbers pulling the EUR/USD southbound yesterday, the currency pair is now testing the mettle of long-standing support ahead of today’s ECB rate decision.
While the central bank is unlikely to cut rates today, there is mounting speculation that we will see a 25bp cut at June’s policy-setting meeting, particularly after the recent euro area inflation release. Therefore, should ECB President Christine Lagarde emphasise a dovish vibe at today’s Press Conference, taking out the current support could be on the cards, a move potentially opening the door to as far south as monthly support coming in at $1.0516.
While the central bank is unlikely to cut rates today, there is mounting speculation that we will see a 25bp cut at June’s policy-setting meeting, particularly after the recent euro area inflation release. Therefore, should ECB President Christine Lagarde emphasise a dovish vibe at today’s Press Conference, taking out the current support could be on the cards, a move potentially opening the door to as far south as monthly support coming in at $1.0516.
Note
Despite some downside seen in the euro (EUR) following the hold decision, the accompanying rate statement did not outright state anything about a June cut. With this now in mind, all eyes will be on ECB President Lagarde.
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