EUR/USD has gone into a consolidation phase near 1.0800 on Easter Friday.ECB’s inaction caused the shared currency to suffer heavy losses on Thursday.The pair is likely to stay on the back foot amid widening ECB-Fed policy divergence.
EUR/USD has recovered modestly amid profit-taking ahead of the Easter holiday after having touched its weakest level in two years at 1.0757 on Thursday. The pair is trading in an extremely tight range near 1.0800 on Friday and it is unlikely to make a decisive move in either direction in the remainder of the day.
Following its April meeting, the European Central Bank (ECB) left its policy settings unchanged. The bank reiterated that the Asset Purchase Programme will be concluded in the third quarter and the rate hike will come ‘some time’ after the end of the QE.
Euro bulls were hoping for the ECB to accelerate the pace of reduction in asset purchases or at least provide a clear timeline on upcoming tightening steps.During the press conference, ECB President Christine Lagarde noted that risks to the inflation outlook were tilted to the upside in the near term but added that they didn’t focus on the euro’s exchange rate in the policy meeting.
EUR/USD Technical Analysis
EUR/USD is facing immediate support at 1.0800 (psychological level). In case this level turns into resistance, the pair could test 1.0760 (post-ECB low) and extend its slide to 1.0730 (Apr. 24, 2020, low) if that level fails.
On the upside, static resistance seems to have formed at 1.0830 ahead of 1.0850 (20-period SMA on the four-hour chart) and 1.0880 (50-period SMA).
EUR/USD recovers above 1.0800 following Thursday’s slump.After suffering heavy losses and plunging to its weakest level in two years at 1.0757 amid the European Central Bank’s inaction on Thursday, EUR/USD staged a modest recovery. With the market action turning subdued on Easter Friday, the pair is moving sideways slightly above 1.0800.
GBP/USD steadies above 1.3050, looks to post small weekly gains.GBP/USD is fluctuating in a tight range above 1.3050 on Friday and remains on track to close the week modestly higher. The sharp decline witnessed in EUR/GBP after ECB’s policy decisions suggest that the British pound captured some of the capital outflows out of the euro.
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