After rising 200 pips above Friday’s closing level during the first three days of the week, the EUR/USD pair is marching towards a negative daily close for the second time in a row. Hurt by Draghi’s comments, EUR/USD slipped to mid-1.08’s on Thursday and found support there. The pair went into a consolidation phase afterward and is trading at 1.0870, down 0.3% on the day.
The ECB didn’t make any changes to its monetary policy. The only somewhat surprising factor was a slight change to the wording of Draghi’s pre-prepared opening statement. Instead of ‘moderate,’ Draghi said that the recovery in the euro area was broad-based and strong.
However, he also highlighted that the Governing Council hadn’t discussed a QE exit strategy and repeated that they could extend the QE beyond 2018 if it were deemed necessary. Following Draghi’s statements, Euro bulls lost control of the market.
The only noteworthy data for the euro tomorrow will be the retail sales change from Germany. Later in the day, the GDP growth from the U.S., which is expected to ease to 1.3% from 2.15 (YoY) for the first quarter of 2017, will be watched closely by the participants.
The initial support for the pair could be seen at 1.0850 (daily/yesterday’s low) ahead of 1.0785 (200-DMA) and 1.0740 (Mar. 29 low). To the upside, resistances align at 1.0900 (psychological level), 1.0950 (Apr. 27 high) and 1.10 (psychological level).