EUR/USD is losing further ground today, testing the mid-1.1200s following the dovish tone from the ECB and Draghi’s press conference. EUR/USD offered on TLTROs, revised projections The pair is testing fresh multi-week lows near the 1.1250 region amidst rising selling pressure among investors as the ECB sounded more dovish than anticipated. In order to preserve price stability, the ECB decided to keep the current levels of interest rates at least through the reminder of the current year. In this regard, it is worth mentioning that market participants are now pricing in the first rate hike at some point in Q3/Q4 2020. The central bank unexpectedly re-assessed its forward guidance and as a result announced a fresh round of 2-year TLTROs (TLTRO-3) starting in September. In the same line, the ECB stands ready to use all available tools in order to lift inflation expectations. At his press conference, President Draghi noted the near term outlook for economic growth appears weaker than anticipated, while the ECB now sees the economy expanding 1.1% in 2019 (from 1.7%), 1.6% in 2020 (from 1.7%) and 1.5% in 2021 (unchanged from previous forecasts). Regarding inflation, the ECB expects consumer prices to raise 1.2% this tear (from 1.6%), 1.5% next year (from 1.7%) and 1.6% in 2021 (from 1.8%) and sees underlying inflation to pick up pace in the medium term. EUR/USD levels to watch At the moment, the pair is losing 0.44% at 1.1256 facing the next support at 1.1234 (2019 low Feb.15) ahead of 1.1216 (2018 low Nov.12) and 1.1118 (monthly low Jun.20 2017). On the other hand, a breakout of 1.1326 (21-day SMA) would target 1.1381 (55-day SMA) en route to 1.1419 (high Feb.28).
Original from: www.fxstreet.com