22.04.202116:26 Forex Analysis & Reviews: EURUSD. The ECB will put an end to the growth of the European currency in the near future

Today's decision of the European Central Bank harmed the European currency, as traders have not received any new guidelines to continue buying the euro at current highs. Most likely, the pressure on the euro will gradually return. However, the bears need to try very hard in technical terms. We'll talk about this later. For now, let's look at the outcome of the European Central Bank meeting.

During the next monetary policy meeting, the European regulator left interest rates and the asset purchase program unchanged. According to the ECB, the growth of coronavirus infection and continued lockdowns have weakened the prospects for economic recovery later this year. The Governing Council, led by ECB President Christine Lagarde, kept the key interest rate unchanged at a record low near zero and the deposit rate at -0.50 percent. The ECB also kept the size of the PEPP bond-buying program at 1,850 billion euros. The central bank said that interest rates would remain at the current or lower level until the inflation forecast approaches a level close enough to 2 percent.

The bank confirmed that the asset purchases will continue at least until the end of March 2022, or when the phase of the crisis associated with the coronavirus ends. Also, the ECB confirmed its position on the increased volume of bond purchases under PEPP. This will keep the growth of bond yields at an acceptable level. ECB economists also decided to continue providing liquidity through TLTRO III long-term refinancing operations.

In general, nothing new and unusual for the market. After the publication of the monetary policy report, traders began to follow Christine Lagarde's speech closely. During a press conference, the European Central Bank president said that she and her colleagues did not discuss phasing out emergency bond purchases. However, she sees signs of economic recovery. Lagarde said that the medium-term risks to the economy are balanced. However, she opposes any suggestion of reducing stimulus measures, as she considers this idea premature.

"Incoming economic reports, surveys, and indicator data suggest that economic activity may have declined again in the first quarter of this year, but point to a resumption of growth in the second quarter," Lagarde said. "Overall, while the risks associated with the euro area's growth prospects continue to decline in the short term, the medium-term risks remain more balanced," the ECB president added.

As for the technical picture of the EURUSD pair, it did not undergo any significant changes compared to the morning forecast, as the trading instrument did not go beyond the side channel. Only a confident break of the level of 1.2025 will lead to new active sales of the euro in the expectation of a decline to the minimum of 1.1975. The more distant target is the area of 1.1925. It will be possible to say that the bulls took control of the market only after the breakout of the level of 1.2080, to which buyers of risky assets even today did not reach. However, as long as trading is conducted above the range of 1.2025, the advantage will remain on the side of buyers of risky assets.

For the availability of the COVID-19 vaccine

News broke today that the Biden administration seriously considers calls from progressive Democrats to speed up global access to COVID-19 vaccines. Simultaneously, the White House needs to support the rejection of intellectual property protection, which major drug manufacturers oppose. Last week, lawmakers led by Senators Bernie Sanders and Elizabeth Warren called on President Joe Biden to support a proposal submitted to the World Trade Organization that seeks a broad waiver of obligations to protect intellectual property rights, including patents, copyrights, and trade secrets for the coronavirus vaccine. The main goal is to simplify the rules for producing and exporting vaccines and other essential medical products needed to fight the COVID-19 virus. Experts believe that supporting this plan will help save many lives in South Africa and India, and more than 50 other countries. Last October, the Trump administration blocked the proposal.

Today, fundamental statistics for France and Italy were released. However, in light of the important decisions of the ECB, traders did not pay attention to these figures. In short, confidence in the French manufacturing sector improved in April this year. According to data from the Insee statistics bureau, the manufacturing sentiment index rose to 104 points in April from 99.0 points in March. Economists had forecast the index to remain at 99.0. Italy's industrial output grew at a weaker pace in February. A report from statistics bureau Istat said production rose 0.2% in February after increasing 2.6% in January.

Mario Draghi and his 16-item spending plan

Even this morning, I spoke a little about Italy, although it has not yet coped with the coronavirus pandemic, is confidently following this path. Today, the details of how Prime Minister Mario Draghi will save the Italian economy with the money of the European Union became known. It is expected that the new plan will immediately include 16 categories of spending that will help Italy get out of the debt hole. The country's latest recovery plan consists of 200 pages and 500 charts detailing how officials want to distribute the money. Draghi plans to receive about 200 billion euros from the EU stabilization fund. Quite simply, the funds allocated in the form of grants and loans (which hardly anyone will give) will allow Italy in this century to turn the page after two decades of stagnation. Approximately 40% of the costs will go to revitalize southern Italy.