EUR/USD made an attempt to rise, but the pair only barely managed to climb above 1.2880 in a gradual move before sliding back down to around 1.2860.
A report that the ECB has been checking the possible consequences of a negative deposit rate with banks was joined by worrying comments from a German member of the ECB about Germany.
Update: EUR/USD recovered most of the fall, and it remains in a tight range.
Update 2: EUR/USD finally broke down to new lows – 4 reasons.
Any talk about negative rates hit the euro, as it reiterates that the ECB is serious about this option, and doesn’t use only to play down the value of the euro. We have seen Draghi say it more than once after the initial statement in the rate decision. Also Ignazio Visco, an Italian ECB member, repeated it.
Jörg Asmussen, a German member of the ECB, who is considered close to Chancellor Angela Merkel, surprised with criticism against Germany. He said that Germany would return to be the “sick man of Europe†without reform, and that Q2 growth isn’t expected to be much better than Q1.
These comments are enough to keep the single currency depressed, but not enough to push it below the current range.
Technical: EURUSD: Bearish Cycles Remains In Play – Elliott Wave Analysis
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