09.03.201814:50 Forex Analysis & Reviews: Global macro overview for 09/03/2018

The European Central Bank has decided to leave the main interest rate unchanged at the level of 0.00%, together with the deposit facility rate at -0.40% and the marginal lending facility at 0.25%. Nevertheless, during the ECB press conference, the market participants received a hawkish modification of the previous statement from the ECB. ECB President Mario Draghi did a lot to ensure that the closing of the path to the re-expansion of asset purchase was not perceived as the imminent end of QE (option of extending the remaining duration). He said that the decision was unanimous and that the Council did not discuss other changes. He was constructive about the outlook for economic growth, but to soften the message he signaled that "inflation cannot yet be announced". Together, this creates a picture where the ECB steps towards standardization in small steps, which will benefit long-term players buying EUR from the middle of last year. But at the same time, Draghi signaled that the ECB will adopt a passive attitude for the coming months (probably until June), which implies that at least from this fundamental source EUR will not get a new reason to strengthen.

Let's now take a look at the EUR/GBP technical picture on the H4 time frame. The market remains locked in a horizontal consolidation between the levels of 0.8688 - 0.9017 for many weeks now. The momentum is still hovering around its fifty level and the stochastic indicator is oscillating from the oversold levels to the overbought levels. As long as the current fundamental and economic conditions remain unchanged (Brexit negotiations, ECB monetary policy etc), the pair should continue its horizontal trend.