Even though several market watchers expected the ECB decision to be bearish for the euro, EUR/USD and EUR/JPY proved them wrong as both pairs caught some solid gains yesterday. EUR/USD broke above the 1.2950 minor psychological resistance and closed at 1.3019 while EUR/JPY landed above 102.00.
The ECB kept rates on hold and didn’t announce any additional easing measures as many expected. As it turns out though, ECB head Draghi’s accompanying statement gave the euro quite a boost as he reassured everyone that the central bank’s monetary policy stance is appropriate and that there was significant progress in Spain and Italy. Another factor that lifted the euro was Draghi’s insistence that there would be no rate cut this year, which was also unexpected.
Only a couple of medium-tier reports are set for release from the euro zone today and these are German factory orders and euro zone final GDP. What could cause commotion in EUR/USD though is the U.S. non-farm payrolls release at 1:30 pm GMT. Make sure you check out Forex Gump’s guide on how to trade EUR/USD for this NFP event!