According to ECB’s Lagarde, exchange rates are important and this leads to an upward rotation

ECB Lagarde said:

• We monitor the exchange rate
• It is obvious that exchange rates can have an impact on inflation

These truisms are not new, but given the more illiquid afternoon markets, this provided a slight boost to the falling EURUSD.

The upward move brought the price briefly above a swing zone between 1.0655 and 1.0675. Today’s high price reached 1.0679. The current price is trading at 1.0670.

Technically, if the price were to break above the 1.0675 level and stay above, the story would be against the February low at 1.0694, followed by the 61.8% breakout at 1.07133. There is a swing zone between 1.0722 and 1.07314 which would provide another key target for increased buying.

With the ECB looking to cut rates in June and the Fed looking to delay the rate cut until later in the year, this gives the green light for EURUSD to sell. However, you never know when a central bank comment may give the seller reason to pause. The technical aspects will help tell the story as it is developed from the news headlines.

The video above explains it all.