DISCLAIMER: The information produced by aQuant is of a general nature only. It is not personal financial advice. It does not take into account your objectives, financial situation, and personal needs.

The ECB session, as markets highly anticipated, did not add anything important to what we knew. The Monetary Policy remained unchanged and there was no sign or hint for tapering a.k.a. reducing the bond-buying – Pandemic Emergency Purchase Program (PEPP) program of the ECB, shortly. The Interest Rates in Eurozone also remained the same at 0% with no visible intention to rise soon. Earlier today, the inflation in Germany was announced at 3.4%, as the markets expected.

In the USA, the dollar started to drop yesterday, following the decline of the bond yields (US 10-year bond yield fell below 1.30% yesterday, although it’s trying to recover today). This week is still bullish for the US currency though, at least so far.

The only major event that may affect the currency markets trend and volatility for the rest of week, is the speech of Christine Lagarde, later today.

EURUSD (current price 1.1827), from yesterday and on, is trying to reverse its bearish direction since the beginning of the week but it’s still about 50 pips lower compared with the weekly open price. The Monetary Policy in the Eurozone, as it was announced at the ECB meeting, removed credits from EUR because, as it seems, the loose policy will carry on. The USD was weaker though, after a drop at the bond yields, showing for one more time that it is the absolute dominator on the pair. The support of the pair to carry on its downtrend is the price area of 1.18 while the bullish recovery course will make sense above 1.1860.

GBPUSD (current price 1.3858) has performed a full recovery, reaching and surpassing the weekly open price. The UK did not have any scheduled economic announcements in the previous days but today, the Industrial Production in July was released at 1.2% vs 0.4% expected, giving extra fuel to the pound. Above 1.3890, the pair may have a better chance to reach the psychological level of 1.40.

USDJPY (current price 109.94) turned bearish yesterday and lost the milestone price of 110 (daily low 109.62), although today it is trying to touch it again. The bond yields that performed losses was the major reason for this movement but today the US 10-year bond yield exceeded the price of 1.30%, helping USDJPY to recover. The price of 110 is technically the most important level for the pair as it defines more or less its trend.