Will the euro rebound following the ECB meeting? Stay tuned.

Will the euro rebound following the ECB meeting? Stay tuned.

14.12.2023

In the previous day’s U.S. currency markets, the Federal Open Market Committee (FOMC) announced that it would keep the policy rate at 5.5%. Federal Reserve Chair Powell stated, “We discussed the timing of rate cuts at today’s meeting” and “The policy rate is near its peak for this cycle.” As a result, the U.S. dollar weakened against all currencies. The EUR/USD pair rose from 1.0773 to 1.0896, gaining approximately 120 pips.From a technical perspective, since the EUR/USD pair is rising from the 200-period simple moving average (SMA) on the 4-hour chart, we should watch to see if the upward trend continues for a while.

Ahead of today’s ECB policy rate announcement, the euro fell against the yen. The EUR/JPY pair dropped by 3 yen, from 157.471 to 154.558. It has continued to test lower levels during today’s Asian trading session. Technically, the EUR/JPY is currently trading just below the 200-day simple moving average (SMA). A break below the 200-day SMA would mean the loss of a major support level, so traders should remain highly vigilant regarding price movements following today’s ECB announcement.

Today, at 3:30 PM, India’s Wholesale Price Index; at 4:00 PM, Sweden’s Consumer Price Index; at 4:30 PM, Switzerland’s Import Prices; at 5:30 PM, the Swiss National Bank’s SMI policy rate and statement; at 6:00 PM, remarks by SNB Governor Jordan; at 9:00 PM, the UK’sBOE policy rate and statement, at 10:15 PM the ECB policy rate and statement, at 10:30 PM US initial jobless claims, Canadian manufacturing sales, US retail sales, and US import price index, at 10:45 PM remarks by ECB President Lagarde, and at 12:00 AM US business inventories.We will be closely monitoring the ECB to see if the euro recovers.