EURUSD sells off amid confusing ECB press conference

The ECB hiked rates by 50bps today, maintaining that another 50bps is coming in March. However, the press conference delivered by president Lagarde proved to be confusing. Besides, obscure phrases like "continuity in a steady state", she pointed to data dependency and a "meeting by meeting" approach. This suggests the 50bps in March is not a done deal. The market interpreted the press conference as dovish and the EURUSD sold off.
The EURUSD hourly trend-following EMAs and momentum-based stochastic crossed down (black ellipses). The stochastic now finds itself below 20 (blue arrow). This level will put EURUSD under further pressure if maintained. From our perspective, core inflation is not sufficiently under control and looking through the fog of today's press conference, the ECB is likely to stay the course.
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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