EURUSD higher for the 6th day in the last 8 trading days

ECBs Lagarde threw in the towel yesterday saying that getting rates back to 0.0% should be done by the end of the 3Q. There are caveats of course. The economies are still fragile and as Justin points out, the central banks are fighting a fire (inflation) that is being fueled by things outside the control of the respective central banks. That is a problem and as Lagarde say "complicated" as a result of the negative supply shocks.

Lagarde's comments from yesterday are below:

• I expect APP to end very early in Q3
• This would allow a rate hike to take place in July, in line with forward guidance
• If inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term stabilises around 2% in medium-term, a progressive further normalisation towards neutral rate will be appropriate
• But the pace and overall scale of the adjustment cannot be determined ex ante
• Situation currently faced is complicated by presence of negative supply shocks
• There are arguments for for gradualism, optionality and flexibility when adjusting monetary policy
• We have one important guidepost for policy, that is to deliver 2% inflation over medium-term
• ECB will take whatever steps are needed to do so

The EURUSD EUR/USD The EUR/USD is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the dollar of the United States (symbol $, code USD). The pair’s rate indicates how many euros are needed in order to purchase one dollar. For example, when the EUR/USD is trading at 1.2, it means 1 euro is equivalent to 1.2 dollars. Why the EUR/USD is the Most Popular Trading PairCompared to all tradable currencies, the euro (EUR) is the world’s second most traded currency, be The EUR/USD is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the dollar of the United States (symbol $, code USD). The pair’s rate indicates how many euros are needed in order to purchase one dollar. For example, when the EUR/USD is trading at 1.2, it means 1 euro is equivalent to 1.2 dollars. Why the EUR/USD is the Most Popular Trading PairCompared to all tradable currencies, the euro (EUR) is the world’s second most traded currency, be Read this Term today has continued the move higher. That rise has the price up for the 6th of 8 trading days since bottoming on May 13 at 1.03485. The price today reached 1.07353 (up 387 pips from the low).

That move higher today took the price above the 61.8% retracement of the move down from the April 21 high at 1.07113.

However the price rise has slowed. The price has been been consolidating over the last 7 or so trading hours between 1.0695 and 1.0735. Of note is the low price stalled near the high price from yesterday at 1.0696.

That 1.0695 area is now a close risk level in the short-term. Stay above would be more positive/bullish, move below and there could be some disappointment from the failed break higher. Traders might look down toward the 1.06421 level on more downside momentum.

On the topside, a break of the high price would have traders looking toward the 1.0757 area. That level corresponds with swing lows from April 14, April 19, and a swing high from April 25. Above that level and the price enters into a up and down consolidation area that peaked at the April 21 high of 1.09356.