Market News & Analysis


Top Story

Christine Lagarde: “Neither a Dove nor a Hawk” at First ECB Meeting

As expected, the ECB left Deposit Rates on hold at -0.5% in Christine Lagarde’s first meeting as President of the ECB.  The ECB reiterated forward guidance and expects rates at present levels until “inflation outlook robustly converges to a level sufficiently close to, but below, 2%”.  The Committee also said that they have all tools available to combat low inflation, however they did raise their inflation outlook slightly for 2022 to 1.6%. As a result, there was a pop in many of the EUR pairs, however they were quickly negated.  In the Q&A afterwards, Christine Lagarde mentioned that Europe is not near “Japanification”, while proclaiming she is “neither a dove nor a hawk but aims to be a wise owl”. 

Source: Tradingview, City Index

The move higher in EUR/GBP could be attributed to the comments, but also the lack of liquidity due to the pending results of the UK Elections today.  (Although technicals should never be relied upon to trade in isolation, they should play less of a factor, or even no factor at all, today because the elections for GBP pairs.)

EUR/USD had a quick pop as well, however on a daily chart price kissed the 200 Day Moving Average and pulling back.  Although the day is still far from over, a close below 1.1135 would form a shooting star, which is an indication of a possible move lower.  Also notice how each time over the past 2 months EUR/USD has traded up to 1.1150 it has been rejected.  There is also a downward sloping trendline from late September which comes across near 1.1160.  If price can get above those resistance levels, the 61.8% retracement from the Jun2 21st highs to the October 1st lows sits just above at 1.1207.

Source: Tradingview, City Index

Horizonal support comes across at 1.1107, and then the 38.2% and the 50% levels from the low on November 29th to today’s highs.  Below there is horizontal support at 1.1030.

Source: Tradingview, City Index

(As of the time of this writing, it appears a trade deal between the US and China may be finalized.  DXY is moving higher and EUR/USD lower.   This continues to be a fluid situation. )


From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.