Positive Remarks From ECB Boost EUR/USD Exchange Rate Above Key Resistance Level

The euro has rallied 1.5% against the greenback in the last two days after it hit a 34-day low of 1.05213, on Wednesday.

And today, during the overlapping period between London and New York trading sessions, the EUR/USD currency pair climbed above 1.065 - a horizontal pivot level of technical significance.

Since Wednesday of last week, the 1.065 area has been respected as support/resistance on multiple occasions, and it would seem this level has turned into support today.

The EUR/USD is now trading about 45 pips away from another significant horizontal resistance level: 1.071.

Since the start of February, the 1.071 price level has been respected by the market on several occasions; twice as support on Feb. 2nd & 6th; three times as resistance on Feb. 7th, 8th and 9th.

The euro has shown strength against the dollar at a time when nationalism and right-wing populism continue to grow in one of EU’s key member states, France.

The euro’s strength today was also driven in part by positive remarks coming from members of the Governing Council of the European Central Bank, which called for continued support of the EU economic recovery:
“Finally, it was felt that a strong call should be made for other policymakers to step up their efforts in support of the euro area recovery and the prospects for sustained growth in the euro area.”
Additionally, the Governing Council of the ECB also said interest rates in the EU will remain low for an extended period of time to help the economic recovery mature further.

While the ECB did say in December of last year that its asset purchases program (APP) would be scaled down to €60 billion a month this year, the Governing Council reiterated today that the APP program may be increased again if the economic outlook becomes "less favourable" in the near future.

Euro banknotes photo by Tax Credits

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