Overall the euro was traded indifferent of the economic new releases this week. The only affection came from the ECB President Mario Draghi who addressed the rate statement after the interest rate decision to hold interest rates and bond-buying program unchanged, which drop the euro pairs harshly, however, they covered the losses right after. Eurozone’s inflation rate picked up to 1.1% yoy in December following November’s 0.6% yoy figure, indicating a rising way towards ECB’s 2% target. Despite all the upbeat data, ECB President appeared dovish, even with no intent to reduce the QE in the near future. He underlined that inflation pressure remains subdued and the surprise rose in December was due to increase in oil prices.
Today, the direction of the EUR/USD will be determined by Donald Trump comments. The new U.S. President-elect Donald Trump takes office today and is expected to take actions for the economy and the currency. If he continues to aim at the improvement of the infrastructure we may see the pair above 1.0800, otherwise, the announcement of trade restrictions and penalties we may see sharp declines on the pair. The next few days, economic will continue to be overshadowed by politics until Trump clear out his policy.
The EUR/USD pair is trading higher after the steep drop experienced during press conference by ECB President Mario Draghi yesterday. The pair almost challenged the 1.0580 support barrier, however, the it ended in green. Currently, the price is approaching the 1.0720 strong resistance level and if there is a break above the latter level, it would open the way for the significant critical level at 1.0800 or slightly below it, at 100-SMA on the daily chart. The MACD oscillator is following a positive path and is moving with strong momentum while the RSI indicator is pointing upwards and is approaching the 70 level. Technical indicators seem to be in agreement with the bullish thought as both are moving above its mid-levels.
