Rising In EURUSD Is Being Suppressed After ECB Decision!

Rising In EURUSD Is Being Suppressed After ECB Decision!

Rising In EURUSD Is Being Suppressed After ECB Decision!

While the attacks towards the 1.22 level in the EURUSD parity, which had a weak week in general, were weak, the declines in the parity gained momentum after the ECB meeting. While the ECB did not make any changes in the interest rates and the asset purchase program at its meeting yesterday, the statements in the decision text that it is early to terminate the PEPP and that the asset purchase program will be accelerated drew attention. ECB President Christine Lagarde, who held a press conference after the decision, stated that they expect the economy to recover by the second quarter, while projections point to an increase in inflation. The ECB also revised upwards its growth and inflation expectations for 2021. On the other hand, the cautious stance that is protected against Kovid-19 regarding the Euro Zone continues to have an impact on macroeconomic data.

On the US side, we saw that inflation, which reached its highest level since 2008 with 4.2 percent in April, continued to increase and reached 5.0 percent in May. Thus, it can be said that the probability of the Fed to step back from expansionary monetary policies has increased following the increasing inflation concerns on the US side. In addition, with the increasing dollar pressure after the inflation data, the parity reached the lowest level in a week with 1.2135. However, this movement was quite limited as the dollar turned to losses again. Especially in the USA, it is seen that the effect of the US 10-year bond rates, which has withdrawn, eliminated the image of the stronger dollar and triggered losses again.

After all these developments, with the parity maintaining its image above 1.2156 level, the rises may gain momentum with the resistance levels of 1.22 and 1.2243. However, in a possible close below 1.2156, we follow the 1.21 and 1.2056 support levels for the continuation of the declines.

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