The Euro has declined heavily during the recent weeks, and one of the core reasons for the same is the disappointing economic data. On the other hand, the US economic releases continue to impress the investors. The Fed sticking with their taper plan and the ECB willingness to make use of unconventional tools has increased a lot of pressure on the Euro bulls. The EURUSD pair recently broke several important support levels to trade lower. One of the most important ones was around the 1.3400 support area. The mentioned level acted a support earlier and might act as a resistance in the near term. Only a weekly close above it would increase the chance of a larger correction in the EURUSD pair.
EBC Interest Rate Decision and Press Conference
A critical risk event was lined up today i.e. the ECB announced the key interest rates, and there was no surprise as the central bank kept it at 0.15%. This was broadly expected by the investors. However, the main focus of the market was on the ECB press conference and Draghi's speech. There was nothing new in his speech. A couple of things to note were:
Employment - He mentioned that labor markets have shown signs of improvement, but the rate of unemployment is still on the higher side.
Inflation - Euro zone inflation expectation remains anchored.
The Euro was seen trading a touch higher during his press conference. However, the market focus was on one more economic release. The US initial jobless claims data was published by the US Department of Labor. The forecast was of a small rise of 2K from 303K to 305K. However, the outcome was on the positive side, as the US jobless claims fell to 289K.
Technically, the EURUSD pair after trading as low as 1.3332 managed to find buyers to trade back above the 1.3350 level. Currently, the pair is charging towards the 1.3400 level. This particular level holds a lot of importance in the short term. If the Euro buyers fail to push the EURUSD pair above this resistance area, then one more decline towards the 1.3330-20 level might be on the cards. On the other hand, if they manage to take the pair higher, then a close above the 1.3400-10 could put the pair back in the bullish zone. In that situation, a run towards the 1.3500 level is also possible.