The Euro strengthened against the U.S dollar on Thursday after the European Central Bank concluded a monetary policy meeting by holding off implementing fresh stimulus measures to ward off deflationary threats in the region.
Despite its recent rate cuts and announced plans to buy assets, the European Central Bank concluded on Thursday it would take a wait-and-see approach to current stimulus tools before loosening policy further should the need arise. ECB President Mario Draghi reiterated that the bank is unanimous in its commitment to using additional unconventional measures if necessary.
He added recent data confirmed that economic growth in the currency bloc is losing momentum and said that the outlook for inflation remained subdued.
The ECB head also outlined details of its asset-purchasing program announced last month, which will see the purchase of covered bonds beginning this month and asset-backed securities later in the fourth quarter. The program is to run for two years and will substantially increase the ECB’s balance sheet, he said, adding the program will also help get inflation back to the ECB’s long term target of 2%.
Intraday bias remains on the upside as 21 and 55 EMA trend indicators are freshly crossed upward in the 1 hour charts signalling a bullish reversal is in play. SSRC, Stochastic, RSI and MACD Oscillator indicators are showing bullish momentum is still intact, so am expecting further rise to 1.27522 resistance (Weekly central pivot) in the short term picture.
Later tomorrow afternoon, investors will be cautiously looking towards U.S. Non-Farm payrolls, Unemployment Rate report and Trade Balance.