ECB’s new leadership is facing a tough year in 2020, with a new president, a new chief economist and the latest addition of two new executive board members makes the bank’s action difficult to predict. Investors are eagerly waiting for signs on ECB’s strategy review as ECB president Christine Lagarde is due to speak on Thursday, a few hours after the release of ECB minutes. Christine Lagarde also refrained ECB’s policymakers from discussing the strategy review publicly as she is planning to formally announce it on January 23.
The ECB re-launched its Quantitative Easing program under Mario Draghi back in September 2019 to aid the ailing Eurozone economy but a few policymakers opposed the decision. The biggest challenge for Christine Lagarde in her strategy review will be the inflation target for the Eurozone area as ECB has consistently failed to meet the inflation target of close to 2%. Since nothing much happened in the December meeting, investors will be scrutinizing details regarding amendment of the Inflation target.
The Euro remained under pressure against the US Dollar since December 31 but the bulls managed to keep the price above the key psychological level of 1.11000. As of writing, the price is hovering around 1.11500. Price action in the EURGBP has been interesting, after falling to the lowest level in three years against the Pound in December. Euro saw a recovery in January as price jumped above 0.85000. EURGBP is currently hovering around 0.85590.
On the technical side, EURGBP on the 4-Hour timeframe has been following an uptrend since January 8. The price jumped above the key level of 0.85000 and registered the highest level of period under study at 0.85953 on January 14. Bulls managed to keep the price above 0.85000 but failed to close above 0.86000. As of writing, the EURGBP is hovering around 0.85590 with positive Moving Average Convergence Divergence but momentum slightly below the 100 level. The pair is currently trading above the 50 period simple moving average with Relative Strength Index above 50 which supports the recent bullish price move. Resistance level lies at 0.855953 while the support level lies at 0.84546. Bulls are eyeing a push above 0.86000, but a close below 0.85000 could strengthen the argument for further bearish movements.
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This article was originally posted on FX Empire
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