A first, the single European currency behaved exactly as it should — it gradually declined. But the growth that began last Friday turned out to be quite significant, although completely unsupported. So, at least some kind of rebound just had to happen. After falling to the level of 1.2000, the single European currency began to grow again. Even though it has already passed this level almost without noticing it, it is not possible to return to the previous values yet. Apparently, we need some serious reasons and justifications for a more serious weakening of the single European currency. But this will clearly have to wait, because today's meeting of the board of the European Central Bank is likely to provide additional support to the single European currency. Since all the parameters of monetary policy will remain unchanged, the focus will not be on the results of the meeting itself, but on what Christine Lagarde will say during the subsequent press conference. The main issue is inflation and its dynamics. The European Central Bank is probably the only one that does not make any secret of the risks of an inflationary spiral, and a few months ago indicated its concern about this problem. Thus, the European regulator warned everyone about the possibility of tightening monetary policy, if the situation requires it. This prospect put some pressure on the single European currency, although it was difficult to see it, as it was stretched out in time. But now, the situation with inflation in Europe seems to have stabilized somewhat, and since then, consumer prices no longer show such a jump in growth. And if Christine Lagarde says today that inflation risks have somewhat decreased, then investors will take this as a signal that the European Central Bank does not intend to make any adjustments to its monetary policy in the near future, since there are no more reasons for this. And since inflationary risks have exerted some pressure, the removal of these risks will lead to the growth of the single European currency.
During the last trading period, the EUR/USD currency pair returned the quote to the area of the psychological level of 1.2000, considering it as a point of variable support.
The market dynamics, after several days of acceleration, has moved to the stage of deceleration, while traders do not exclude the possibility that the existing fluctuation within the level of 1.2000 may serve as a cumulative process in the upcoming acceleration.
If we proceed from the current location of the quote, the amplitude of 1.1950/1.2000 is visible. But this is only the outline of the psychological range, since the control coordinates relative to which actions will be performed have different values.
Looking at the trading chart in general terms, the daily period, it can be seen that the scale of the euro's strengthening in the period of April reached such a large size that it called into question the oblong correction from the peak of the medium-term trend.
In this situation, we can assume that the movement of the quote in the amplitude of 1.1950/1.2000, has a temporary phenomenon in the market, where the coordinates will be used as signal levels: 1.1990- sell signal; 1.2080- buy signal.
From the point of view of complex indicator analysis, we see that the indicators of technical instruments on the hourly and daily intervals have a buy signal, due to price fluctuations at the peak of the ascending cycle for April.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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