Jan 21 (Reuters) – EUR/USD maintained earlier positive factors on Thursday after the ECB’s newest coverage assertion and President Christine Lagarde’s information convention, however worth motion suggests they won’t be overly assured.
The ECB assertion was little modified from December whereas Lagarde despatched some blended messages.
Her remark that draw back progress dangers have been much less pronounced helped rally EUR/USD, however she tempered bulls’ enthusiasm by saying that inflation remained weak, that the FX fee is being monitored very rigorously and that FX appreciation is a drag on inflation.
EUR/USD bulls’ restricted confidence might be pushed by the U.S. charges and inflation markets. Final week’s U.S. Treasury public sale and Fed Chair Jerome Powell’s feedback helped stem the rise in U.S. charges however they didn’t reverse the bull pattern.
U.S. 5-year/5-year inflation linked swaps US5YF5Y=R and U.S. 10-year Treasury yields US10YT=RR appear poised break increased as each are in consolidation phases of their longer-term rallies. As soon as these rallies resume the greenback is prone to strengthen.
Month-to-month technicals probably concern EUR/USD longs. A big doji, which suggests indecision, is forming and month-to-month RSI implies longer-term momentum is bearish.
Until U.S. rates of interest and the greenback weaken quickly EUR/USD bulls may stay tentative and the pair’s upside might be restricted.
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(Christopher Romano is a Reuters market analyst. The views expressed are his personal)
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.