EUR/USD Price Runs Out of Steam at 1.18, Eying at ECB
The EUR/USD price on Wednesday, July 21, continued to crawl. Volatility for the pair remains rather weak, and the macroeconomic background is completely absent.However, today everything may change, as today the results of the ECB meeting, which traders have been waiting for from the very beginning of the week, will be summed up.–Are you interested to learn more about ? Check our detailed guide-Basically, for the first three trading days of the week, nothing has changed for the EUR/USD pair. This is because its technical picture remains the same on all timeframes. Therefore, both the prospects of the pair and its fundamental background have remained the same.Based on this, we still expect the downward movement to end around the 1.1700 level. However, we all clearly see that the pair does not move down but creeps down. This suggests that traders are very reluctant to buy the Dollar and sell the Euro.Recall that the ECB has not changed the parameters of monetary policy for a long time. The rates have been ultra-low for several years now. The PEPP program last changed in size last year. The only change that could be noted in 2021 is an increase in the rate of asset repurchases from the open market under this very PEPP program. Christine Lagarde announced that the ECB is changing its approach to inflation targeting for a couple of weeks, and now it is not “2% or slightly lower”, but “just 2%.”Traders still did not react to this important information at that time, so there is no reason to expect a reaction to it on Thursday. In this way, Christine Lagarde’s rhetoric is likely to remain unchanged. The ECB will again declare that the PEPP program will continue to operate until the end of March 2022. In general, until the regulator decides that the crisis caused by the pandemic and the pandemic itself have passed. Also, as a target, the ECB will again use inflation, which, in its opinion, should be “about 2%” in the medium and long term.At the moment, nothing of the kind can be said about European inflation. The consumer price index barely got to the 1.9% level by June this year and in the last month did not even show any acceleration, in contrast to American or British inflation. Therefore, it is far from certain that the CPI will continue to grow in the European Union at all. However, if it does not grow, the ECB will have no reason to end it.Moreover, in recent months, central bankers have argued that the acceleration in inflation is temporary, driven by rising energy prices and last year’s low base. Thus, inflation may start to slow down in the coming months. But if the US inflation will slow down from the current 5.4%, in the UK from the current 2.5%, then in the European Union from the current 1.9%.–Are you interested to learn about? Check our detailed guide- EUR/USD price technical analysis: The EUR/USD price managed to gain some bids from mid-1.17 and successfully surged beyond the 20-period SMA on the 4-hour chart. However, the price is still under the 50-period SMA, and there is no clarity in the trend as there is still no sign of bullish reversal yet. However, we can only confirm a bullish signal if the price manages to break the 50-SMA with a very high volume.
Support levels:S1 – 1.1780S2 – 1.1719S3 – 1.1658Resistance levels:R1 – 1.1841R2 – 1.1902R3 – 1.1963Looking to trade forex now? Invest at eToro!67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.