EUR Moving Higher
The Euro has been broadly higher today on the back of comments made by ECB president Lagarde yesterday. Testifying to European Parliament, Lagarde was seen reaffirming her commitment to bringing inflation back down to target. On the back of the bank’s latest half-point rise last week, Lagarde told members of the Economic and Monetary Affairs Committee that recent market turmoil would not deter the bank from pursuing its goal of price stability. Indeed, Lagarde even suggested that recent events might help the bank via a weakening of demand.
Hawkish ECB Comments
Traders have recently scaled back their ECB rate projections for the year ahead and Lagarde was keen not to commit to any further hikes at the last ECB meeting. However, speaking yesterday, Lagarde said that rate adjustments remain the bank’s key tool in targeting inflation. These comments come on the back of a slew of hawkish comments over the weekend which saw several ECB members voicing support for further hikes this year.
Commenting on current concerns, Lagarde stressed the resilience of the eurozone banking sector and its lower exposure to Swiss banks when compared with American rivals. However, the ECB chief did urge regional banks to focus on preserving liquidity levels warning of a potentially less favourable environment ahead. Traders now look to Lagarde for further insight as she continues her testimony today.
Technical Views
EURUSD
For now, EURUSD remains rangebound between support at 1.0515 and resistance at 1.0785. However, with price moving strongly off support and with momentum studies increasingly bullish, the focus is on a break higher and a continuation of the bull channel towards 1.1126 next.
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