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EUR/USD – Mario Draghi’s speech, U.S. CPI and FOMC minutes today – Analysis for April 11th 2018

Ewald Nowotny’s comment boosted the common currency and pushed the pair above the previous resistance at 1.235 level. Today’s we’re expecting for Mario Draghi’s speech in Frankurt and a release of important inflation numbers in the United States. Support is set at 1.23, resistance at 1.24.

Commentary:

The euro has gained significantly after a comment of Ewald Nowotny from the European Central Bank. In an interview Nowotny told Reuters that the bond buying programme would be ended until the year-end. This could pave the way for a first rate hike since 2011. Some time later the EBC spokesman said that Nowotny’s comment does not represent the view of the Governing Council, responsible for rates. Still, the euro remains near the highest level since March 28. Amid these news, today’s speech of Mario Draghi may be even more influential than usually for the euro’s direction.

The greenback has dropped, the dollar index is currently seen near the lowest level in two weeks. The dollar was unable to find support on the back of Chinese president speech, who layed out his plans to lower tariffs on car imports and imposing more strict intelectual rights protection. Xi Jinping’s plan was commented by Donald Trump who expressed confidence that the world’s two biggest economies would come through the current trade spat and „make great progress together”. This may lead to a believe that the probability of a full-blown trade war is fading away. Yesterday’s data showed a bigger-than-expected rise of producer prices, which may suggest a buildup of inflation pressures. Today we’ll have more information about the inflation as the consumer price index numbers are due to be released in the afternoon.

Today’s releases:

  • 13:00 Euro zone – Mario Draghi’s speech in Frankfurt
  • 14:30 USA – Consumer price index
  • 14:30 USA – Average earnings
  • 20:00 USA – FOMC meeting minutes

Analysis:

Pic.1. EUR/USD chart.

This may be a busy and highly volatile day for the EUR/USD pair. At first, the markets will focus on the speech of Mario Draghi. If the EBC’s head confirms the ending of the bond buying program or gives any hints of a plan to normalize the monetary policy, the euro could get a boost. Later on, inflation numbers and FOMC meeting minutes releases will be the main driving factor for the pair.

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