The Euro got a lift on month-end demand flows and the ECB decision to keep its main refinancing rate unchanged while announcing that there would be no QE expansion as some had anticipated. EUR/USD closed at 1.0952 in late New York after trading to an overnight high at 1.09725, just short of the 1.1000 strong resistance level. The ECB said that they were prepared to increase the size and adjust the composition of its pandemic emergency bond purchase program (PELTRO). ECB President Lagarde has expressed her worry that the Eurozone economy see a 12% contraction in 2020.
We highlighted earlier this week that net speculative Euro long bets increased to the biggest since June 2018. This will keep a barrier to any topside moves on the Euro for now. EUR/USD has immediate resistance at 1.0975 followed by 1.1000. The next resistance can be found at 1.1030. Immediate support lies at 1.0900 followed by 1.0870. Look for the Euro to trade in a likely 1.0830-1.0960 range today. Prefer to sell rallies.
