European Central Bank (ECB) President Mario Draghi made additional dovish comments on Wednesday, saying they may postpone hiking interest rates if required. However, on a more positive tone he said they are aiming towards hitting inflation targets of 2%. He also added a comment on banks saying they could be bringing forward measures that can safeguard the favorable implication of negative rates for the economy in an attempt to improve the overall banking system. European banking stocks including Deutche Bank and BNP Paribas rallied in trade on Wednesday, with many analysts pointing at Draghi’s comments for the reason. EURUSD moved lower yesterday breaking our (R1) 1.1260 support level now turned to resistance. If the EUR gets in buying trend we could see the pair climb over the (R1) 1.1260 resistance level and aim even higher for the (R2) 1.1300 resistance line. Even higher we could see the pair reaching the 1.1340 resistance barrier. However if traders support a selling momentum for the EUR we may see the common currency moving towards the (S1) 1.1220 support line and break even lower for the (S2) 1.1175 support level.
Brexit: Teresa May offers to quit under certain conditions
British Prime Minister Theresa May said on Wednesday she is willing to quit if her deal passes on Thursday. Sterling moved up by 0.5 percent on Wednesday on a report that former British foreign minister Boris Johnson, could back Theresa May’s Brexit deal after her promise to step down. The Conservative Eurosceptics are aiming for better negotiations on the terms and future of the UK’s relationship with the EU. Cable later corrected as no progress was made and Brexit remains in a deadlock. Caution is advised as the GBP could come under strong volatility. EURGBP traded in a tight range yesterday with our (R1) 0.8525 resistance level being in between. In a bullish scenario we could see the pair advancing towards the (R2) 0.8590 resistance barrier and even higher for the (R3) 0.8655 resistance level. In the opposite direction, if we see the GBP being purchased we could see EURGBP moving lower for the (S1) 0.8455 support barrier. Even lower we could see the (S2) 0.8385 support level and the (S3) 0.8315 support barrier.
Other economic highlights, today and early tomorrow
In today’s European session, we get CNB interest rate decision while in the American session we get the US GDP for Q4. After that we get from the Eurozone, Germany’s inflation data from March and later on the US Pending Home Sales figure for February. As for speakers, please note that ECB’s Luis De Guindos, FOMC Members Quarles, Clarida, Bowman, and Williams, Bullard, SNB Governor Board Member Maechler, and RBNZ Governor Orr Speaks
EUR/USD Daily chart
Support: 1.1220 (S1), 1.1175 (S2), 1.1130 (S3)
Resistance: 1.1260 (R1), 1.1300 (R2), 1.1340 (R3)
EUR/GBP H4
Support: 0.8455 (S1), 0.8385 (S2), 0.8315 (S3)
Resistance: 0.8525 (R1), 0.8590 (R2), 0.8655 (R3)
