EUR/USD pops to session highs following release of ECB minutes

Author: Justin Low | Category: News

The pair touches above 1.2000 after the ECB releases its Dec meeting minutes

Yesterday, the pair tried a test of the 1.2000 level and buyers and sellers initiated a tug of war battle that I pointed out here.

It's now trying a test to get above 1.2000 again, facing resistance at the same level it did yesterday - the 200-hour MA @ 1.2006. Yesterday's high hit 1.2018 but the pair later on moved back lower as sellers won the battle.

The content of the ECB minutes wasn't really a surprise as this was news that came to the market's attention even back in November here. But this is the first time that it is documented in the minutes of a meeting, but eventually talks of forward guidance would surely come in.

The talk of an early change to forward guidance will give the EUR a temporary reprieve, but once again the key issue is inflation. Unless wages start rising to fit the ECB's template, I don't see how the ECB can begin to change its communication - not when they themselves are not sure on when their QE programme will run until.

Update: EUR/USD hits a high of 1.2012 now, as buyers are taking it above the 200-hour MA again. If it stays above here today, we are likely to see a move higher towards the January high of 1.2089.