EUR/USD: Looking Bullish After Quickly Shrugging Off

• EUR/USD is back to the same range just below 1.1300.
• Draghi's dovishness sent it down, but also the Fed is going there. 
• The technical picture is bullish for the pair.

EUR/USD is trading just below 1.1280, the same levels it kicked off yesterday's session. In the middle, the pair dropped sharply on a slightly dovish European Central Bank decision.

The ECB left its policy unchanged as expected and promised detail about the new funding scheme, TLTRO, only in the next meeting in June. However, Draghi repeated his stance that risks are tilted to the downside. He said that the risk of a recession is low, but the mere mention sent shivers down markets' spines, and EUR/USD dropped.

The fall did not go too far and the pair bounced back up. The quick recovery is a sign of strength. Something that cannot fall on bad news, has room to the upside.

This partly stemmed from events on the other side of the Atlantic. US core inflation slowed down to 2.0% from 2.1% seen last time and that was expected. Subdued inflation means there is no pressure on the Fed to raise interest rates. 

And the Fed also had its word with the FOMC Meeting Minutes. The document reflected the patient stance regarding raising interest rates. Moreover, it confirmed that several members see interest rates going both ways. The door is open to rate cuts, albeit not very soon. The minutes somewhat weighed on the USD.

No less than four FOMC members will speak today: Richard Clarida, John Williams, James Bullard, and Michelle Bowman are scheduled to talk later on and they can shape the next EUR/USD moves. In addition, the US releases the Producer Price Index, which usually doesn't move the markets.

Brexit is also on the agenda. The EU decided to postpone the UK's exit until Halloween, October 31st. It could leave earlier if Parliament approves the accord. The pound is not moving too much, and the euro does not respond. News regarding the talks between the government and the opposition Labour Party or UK PM Theresa May's future could make waves.

All in all, markets are looking for new triggers to move.

EUR/USD Technical Analysis 

EUR/USD enjoys upside Momentum on the four-hour chart and the Relative Strength Index is also moving higher. The pair is also trading above the 50 Simple Moving Average and approaching the 200 one. 

All in all, the picture is positive.

Some resistance awaits at 1.1285 which capped the pair in late March and also earlier this week. 1.1330 was a swing high in late March and served as support earlier. 1.1360 capped it in mid-March. 

1.1255 provided support earlier this week. 1.1210 was a low point last week and also in late March. The 2019 trough of 1.1176 is next down the line.

Image sourced from Pixabay