- The euro is expanding its gains at all levels after the ECB meeting.
- The US dollar is gaining ground after a short recovery.
EUR / USD broke higher and jumped to 1.1362, reaching the highest level since March 11. From the top, back and at the time of writing, it is trading at 1.1315, up 90 pips for the day, en route to the eight consecutive daily gains.
ECB and weak USD boost EUR / USD
The euro is among the best-performing countries on Thursday after the orientation meeting of the European Central Bank. The ECB has met expectations by keeping rates unchanged and increasing the emergency purchasing program from € 600 billion to € 1.350 billion and extending it until June 2021.
“We now have more easing from the ECB but a stronger euro. In our view, this is likely to be the case, as these actions effectively cap tail macroeconomic risks. Thus, the decline in uncertainty becomes a propellant of the strength of the FX, “said analysts at Danske Bank.
The stronger euro stimulated the EUR / USD which also received a boost from the decline of the US dollar. After a short recovery, the DXY resumed the decline, falling below 97.00 for the first time since early March.
Not even higher US yields help the US dollar. The ongoing Wall Street rally is keeping safe haven assets under pressure, including the dollar. The Dow Jones is slightly higher and has reached new monthly highs.
EUR / USD holds a positive tone with technical indicators signaling an extreme overbought reading but so far indications of correction. The area around 1.1345 / 50 is a relevant technical level, and a consolidation above would pave the way for further gains. On the other hand, now 1.1290 is immediate support followed by 1.1255.