ECB No Change takes EURUSD to one week highs


ECB leaves policy and guidance unchanged, confirms QE schedule of EUR 30 bln from January to September next year “or beyond, if necessary”. So there is still no commitment to an end date for QE and the statement also re-affirmed that interest rates will “remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases”, which suggests rates hikes won’t be on the agenda until 2019 at the earliest. Furthermore maturing assets will be reinvested until well after the end of net asset purchases, so a reduction of QE holdings won’t be an issue until then either. Not much movement in Bund yields on the announcement and peripheral yields, which dropped on the BoE statement earlier also remains down. The focus now turns to the press conference and here we expect a slightly more hawkish tone as growth and inflation projections are likely to be revised up, although with the overall guidance unchanged clearly Draghi is not ready to commit to an end date for QE just yet.

H1 support is at 1.1796 and the 200 period moving average, with resistance at 1.1844, 1.1862 and 1.1900.

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Stuart Cowell

Senior Market Analyst


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