EUR/USD Forecast - Prices, Charts, and Analysis

• The ECB leaves all policy levers untouched.
• EUR/USD is currently stuck in a 30-odd tick range.

Most Read: Euro Q1 Technical Forecast: A Mixed Picture

The European Central Bank left all policy settings untouched earlier, as widely forecast. The prepared statement with the announcement gave little away with ECB President Lagarde saying that

‘the key ECB interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to this goal. The Governing Council’s future decisions will ensure that its policy rates will be set at sufficiently restrictive levels for as long as necessary.’

The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4.50%, 4.75%, and 4.00% respectively.

Financial markets now see 125 basis points of interest rate cuts this year, the same level seen before the announcement.

ECB Implied Rates and Basis Points

The Euro barely moved on the announcement and remained in a tight range against the US dollar. The pair has traded between 1.0870 and 1.0902 so far today and traders will hope that the upcoming ECB press conference (13:45 UK) may add some volatility to the, currently, lifeless pair. Support is seen off the 200-day simple moving average (black line on the chart) that sits just below 1.0850, while 1.0950 will be tough to break unless there is any strength in today’s US Q4 GDP figure.

EUR/USD Daily Chart

Charts Using TradingView

IG retail trader data shows 49.86% of traders are net-long with the ratio of traders short to long at 1.01 to 1.The number of traders net-long is 6.55% lower than yesterday and 1.53% lower than last week, while the number of traders net-short is 6.42% higher than yesterday and 1.40% higher than last week.

What is your view on the EURO – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

https://www.dailyfx.com/news/ecb-leaves-interest-rates-unchanged-eur-usd-listless-ahead-of-press-conference-and-us-q4-gdp-20240125.html