Euro initial dipped but recovered after ECB President Mario Draghi’s comments (in the introducatory statement) on the economy. The point that triggered the reaction is that while data since March “points towards some moderation” in growth, the data were still “remaining consistent with a solid and broad-based expansion of the euro area economy”. And, he added that “the underlying strength of the euro area economy continues to support our confidence that inflation will converge towards our inflation aim of below, but close to, 2% over the medium term.”
The comments are rather upbeat comparing to the usual standard cautious tone of Draghi.
However, strength in the Euro is limited after the “normal” cautious Draghi comes back saying that it’s important to determine if softer data temporary or permanent.
EUR/USD’s breach of 1.2154 key support is brief so far. And the recovery could turn focus back to 1.2244 minor resistance. But it will take more time for traders to make up their mind. For now, more downside is still expected as long as 1.2244 holds and a break of 1.2154 is still more likely than not.
On other hand, EUR/GBP is still pressured despite the recovery attempt. Focus is back on 0.8688 minor support. Break will indicate completion of rebound from 0.8620. That could trigger EUR selling elsewhere.
