ECB policy decision and press conference are the main focuses for today, even though no policy change is expected. After the conclusion of the strategic review on July 8, officials are clear that they’re going to adjust the forward guidance to align with the new symmetric 2% inflation target, which allows a temporary overshoot. Overall reactions could, however, be rather muted.
Here are some previews:
- ECB Preview: New Forward Guidance to Reflect New Inflation Target
- ECB Preview: Lagarde To Be Dovish As She Drives Home Strategic Review
- ECB Meeting: Locking in Negative Rates for Longer
- ECB Preview – Aligning Forward Guidance to Strategic Review Outcome
Euro is currently rather mixed in general. EUR/USD is clearly losing downside momentum as seen in 4 hour MACD. But current fall from 1.2265, as the third leg of the pattern from 1.2348, could still extend towards 1.1703 support and even below. Nevertheless, break of 1.1880 resistance would be a sign of near term reversal and bring stronger rebound through 1.1974 resistance.