No rate hikes for the ECB until summer 2019

ECB remained on hold yesterday as was widely expected and it seems to be the case that it will remain so until the summer of 2019. Yesterday’s interest rate decision was overshadowed by the dovish accompanying statement which stated that the bank does not intend to make any rate hikes until the summer of 2019. On the EUR positives, it should be noted that the ECB announced the gradual tapering of its QE program, starting end of September and with a final wrap up by the end of the year. EUR/USD dropped by some 300 pips scoring the highest losses and we could see the EUR weakening further should it be guided by the decision over the next few days.

EUR/USD dropped heavily yesterday, breaking its sideways motion pattern, as well as the 1.1715 and the 1.1640 support levels. It continued its drop to test the 1.1550 support level and stabilized slightly above it. The pair could prefer to take a breather after yesterday’s drop and move in a sideways manner today as the financial releases could provide some support for both sides. On the other hand the market favored USD long positions yesterday and we could see that sentiment provide some bearish tendencies in today’s sessions. If the bears take over again we could see the pair breaking the 1.1550 support line and aim if not break the 1.1470 support level. On the other hand should the bulls be in the driver’s seat, we could see the pair breaking the 1.1640 resistance level.