When is the European Central Bank (ECB) rate decision and how could it affect EUR/USD? – by hareshmenghani ECB InterestRate EURUSD Majors Currencies
the post-meeting press conference at 13:45 GMT. Investors had begun to doubt if the ECB will stick to its commitment and deliver another big rate hike following last week's collapse of two mid-size US banks - Silicon Valley Bank and Signature Bank. That said, reports on Wednesday indicated that ECB policymakers are still leaning towards a jumbo 50 bps lift-off.
According to Matías Salord, News Reporter at FXStreet: “The ongoing turmoil in the banking system has become a factor of uncertainty. One more. Its impact is not yet defined. Contagion fears appear partially contained at times, but it could all change in the near future. The ECB has to decide on Thursday what to do with the mentioned context. The damage so far from the SVB drama is unknown. Such circumstances look unlikely to change the course of the 50 bps rate hike expected.
Furthermore, a 25 bps lift-off, with no forward guidance or a shift to smaller hikes going forward, should be enough to weigh heavily on the Euro. This, in turn, suggests that the path of least resistance for the EUR/USD pair is to the downside. Hence, any positive market reaction is more likely to get sold into and runs the risk of fizzling out rather quickly.
Eren Sengezer, European Session Lead Analyst at FXStreet, outlines important technical levels to trade the major and writes: “EUR/USD was last seen trading in 1.0620/30 area, where the 50-period and the 10-period Simple Moving Averages align. In case the pair stabilizes above that region, it could face interim resistance at 1.0660 before targeting 1.0690/1.0700 area .”Key Notes
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