During yesterday's trading day, Christine Lagarde announced that the European Central Bank has decided to maintain the current interest rate structure, leaving the reference interest rate at 0%, the deposit facility rate at -0.50%, and a marginal credit rate of 0.25%, complying with the expectations of the market consensus.

After the meeting, the ECB also announced that it intends to accelerate its purchases of emergency bonds in order to avoid the growth of yields on European bonds in the coming months, although it did not clarify whether, for the moment, they intend to expand said purchase program.

In the US, Joe Biden has signed the new aid program approved by Congress and the Senate for an amount of 1.9 trillion dollars, so stimulus checks will once again be issued to American households.

This approval coincided with the release of unemployment benefit request data. This week’s data is not only been better than last week's, but also better than expected, since requests reached a total of 712,000 compared to the estimated 725,000.

Since the beginning of the week, we have been able to observe how the euro has strengthened against the dollar after bouncing off the average of 200 trading days that currently acts as its main support level at the beginning of this week, although after yesterday's trading day, the price bounced down again after approaching the vicinity of the 1.20 level and its 18-session black average.

If the price finally continues with this new bearish momentum, it is important if it is able to break down to its 200-session support average or if, on the contrary, it performs a double-bottom formation that could lead to a change in trend.

The break of the current support level could open the doors to a further retracement to the area of ​​its uptrend line.

(Click on image to enlarge)

Source: EURUSD daily chart of Admiral Markets MetaTrader 5 platform from December 5, 2019 to March 12, 2021. Taken on March 12 at 1:00 p.m. CET. Note: Past performance is not a reliable indicator of future results, or future performance.

Price evolution of the last 5 years: 

• 2020 = + 8.93%
• 2019 = -2.21%
• 2018 = -4.47%
• 2017 = + 14.09%
• 2016 = -3.21%