Draghi Drag? EUR/USD Makes A Small Bow
The economic situation in the euro-zone is improving. While Draghi had to acknowledge this, he sticks to his stance regarding accommodative monetary policy. Draghi spoke at a conference in Portugal and said that interest rates have to be low for growth to recover.
However, EUR/USD does not go too low.
Why? This is not news from Draghi. We already learned that the President of the ECB would prefer not to reveal the next steps of the Bank’s policy until late in the year.
The ECB currently buys 60 billion euros worth of bonds per month. The program runs through the year and the ECB is expected to taper down its monthly buys from 2018. Some of Draghi’s colleagues at the Governing Council have already expressed their wishes to begin some kind of “normalization”.
Nevertheless, Draghi is not convinced by inflation, which remains low, and does not see it as rising in the future.
EUR/USD is stuck in a range
EUR/USD slipped from the highs of 1.1220 to 1.1190 but remains entrenched in range. Support awaits at 1.1160 and 1.11. Resistance awaits at 1.1240 and 1.13.
Earlier, EUR/USD advanced on the weak data coming out of the US: Durable goods orders badly disappointed.
All in all, EUR/USD is stuck.
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