4 min readThe European Central Bank (ECB) has announced its latest interest rate decision, leaving interest rates unchanged at 2% for a second straight meeting. The decision comes as the ECB awaits more clarity over how the US-EU trade agreement is impacting the Eurozone economy.
Of note, the ECB sees inflation stabilising around 2% over the medium term. The central bank raised its growth forecast for this year to 1.2% but lowered GDP projections to 1% next year. The ECB reiterated its meeting-by-meeting and data-dependent approach.
US CPI inflation data was also released shortly after the ECB meeting, adding to the market reaction. The market sees a reduced chance of a rate cut this year and 50/50 odds of a cut in the coming six meetings. Attention will turn to ECB President Christine Lagarde’s press conference.
EURO VS DOLLAR (EUR/USD):
If we take a closer look at the technicals, we can observe how the price was trading -0.09% at 1.1685 before the rate decision, and post the decision the price is trading +0.19% at 1.1719. However US CPI data has also been released, dragging on the USD. On the 4-hour chart, the price is testing the falling trendline resistance and 1.17 round number. Buyers will loook to rise above here to bring 1.1775 into focus.
EURO STOXX 50 (EUR50):
The EURO STOXX 50 has seen little volatility from this ECB interest rate decision. Before the announcement, the price was trading +0.44% at 5382. The price is unchanged post announcement. On the 4-hour chart, the price trades above the multi-month rising trendlinne. The recent recovery from the 5300 low has taken the price above the 200 SMA and the short term falling trendline. If the price holds these supports a move towards 5410 and 5490 could be on the cards. Failure to close above the 200 SMA could see the price retest the rising trendline support.
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