EUR/USD manages to retest the area of daily highs in the 1.1615/20 band following the ECB decision on rates. EUR/USD navigates the low-1.1600s after the ECB’s Governing Council left its monetary status quo on hold at Thursday’s event, matching the previous expectations. In fact, the ECB left intact the interest rate on the main refinancing operations, the interest rate on the marginal lending facility and the deposit facility at 0.00%, 0.25% and 0 -0.50%, respectively.
The central bank kept the PEPP envelope unchanged at €1.85 trillion as well as the €20B pace of purchases under the APP. The ECB reiterated the "moderately lower pace" of net PEPP purchases. As in previous meetings, the ECB said rates are seen at current or lower levels until inflation hits the bank's 2% goal well ahead of the end of its forecast horizon and lastingly for the rest of the projection horizon.
Moving forward, market participants will now closely follow the usual press conference by Chairwoman Lagarde and the subsequent Q&A session. On the data front, advanced inflation figures in Germany see the CPI rising 4.5% YoY in October and 0.5% from a month earlier. So far, spot is losing 0.05% at 1.1596 and faces the next up barrier at 1.1669 (monthly high Oct.19) followed by 1.1699 (55-day SMA) and finally 1.1755 (weekly high Sep.22). On the other hand, a break below 1.1584 (weekly low Oct.26) would target 1.1571 (low Oct.18) en route to 1.1524 (2021 low Oct.12).
