EUR/USD remains on the defensive near 1.2170 area, moves little post-ECB

  • EUR/USD found support near mid-1.2100s and stalled the overnight pullback from one-week tops.
  • The ECB’s decision to maintain the status quo did little to provide any meaningful impetus to the pair.
  • Investors now look forward to the post-meeting press conference and the US CPI for a fresh impetus.

The EUR/USD pair held steady near the top end of its daily trading range, around the 1.2175-80 region and moved little post-ECB announcement.

The pair stalled the previous day’s retracement slide from one-week tops and attracted some dip-buying near the 1.2155 region on Thursday. The uptick, however, lacked any strong follow-through and remained capped amid a modest US dollar strength, supported by a goodish pickup in the US Treasury bond yields.

Meanwhile, the EUR/USD pair had a rather muted reaction to the latest ECB monetary policy decision. As was widely anticipated, the European Central Bank left its monetary policy settings unchanged and indicated that it was in no hurry to slow the pace of the emergency bond-buying program.

In fact, the ECB reaffirmed that it will continue to conduct net asset purchases under Pandemic Emergency Purchase Programme (PEPP) with a total envelope of €1,850 billion until at least the end of March 2022. The dovish bias seemed to be the only factor that kept the euro bulls on the defensive.

Market participants now look forward to a fresh round of staff projections and the post-meeting press conference. Comments by the ECB President Christine Lagarde will be closely scrutinized for clues about future tapering plans and infuse some volatility around the EUR/USD pair.

Technical levels to watch

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