EUR / USD surged, with the ECB delivering just enough surprise upside, making more QE than expected at 600 billion euros. TD Securities economists are now awaiting Largarde’s speech to see if the pair can break above the 1.13 level.
“The ECB delivered more than expected, increasing the size of the PEPP from 750 billion euros to 1350 billion euros, and extended its target end date from December 2020 to June 2021. This would imply that the ECB continues to buy at the current rate around € 25 billion per week for next year. ”
“With the ECB offering new accommodations, it continues to support the recovery and stimulate sentiment. While this may be somewhat counterintuitive, we believe it should maintain support for EUR / USD prior to the press conference. ”
“The market’s instinctive reaction managed to place itself above the day’s high at 1.1257. We will have to see if Lagarde’s message gives enough upward momentum to propel us towards the next group of attractors north of the 1.13 bar. “