EUR/USD: ECB gives a boost to the euro, rally to run towards 2020 high at 1.2177

The European Central Bank (ECB) added €500 billion to QE and will run the program into 2022. Weak language on the exchange rate also boosts the euro. More EUR/USD gains are likely, Yohay Elam, an Analyst at FXStreet, reports.

Key quotes

“The ECB added €500 billion to its Pandemic Emergency Purchase Program, as expected, but surprised by extending the scheme all the way to March 2022. Investors were also comforted by the lack of language change regarding the exchange rate.” 

“Christine Lagarde, President of the ECB, was only marginally more dovish in her press conference, responding to a question by saying the bank is monitoring the euro ‘very carefully.’ She also stressed that the bank has the option to cut rates, a specter that scares markets, but that option is always there – it was not an imminent hint of action. Overall, the ECB delivered on its promises without trying to lower the euro – a win-win for EUR/USD.”

“US weekly jobless claims leaped to 853,000, a worrying sign. The data may push Congress to agree on a stimulus package, yet negotiations have yet to yield fruit.”

“Resistance awaits at the 2020 high of 1.2177. The next levels to watch are 1.22 and 1.2250. Support awaits at 1.21, 1.2075 and 1.2060.”