EURUSD recovered from earlier losses and swung to a daily gain. Main currency pair was supported by a speech from ECB President Lagarde. Lagarde said that recession is increasingly likely but it will not bring down inflation significantly. That's why Lagarde expects the ECB to raise interest rates further as, according to her, interest rates remain the most effective tool. Speaking on balance sheet, Lagarde said that normalization of the balance sheet is appropriate but it should be conducted in a measured and predictable way in order not to destabilize markets. She also touched on a topic of fiscal policy saying that it should be temporary and target, and warned that cutting investment levels may harm growth as supply will not be able to be rebuilt.
EURUSD recovered from a daily loss and is now trading higher on the day. However, this gain is not major and amounts to 0.1% at press time. From a technical point of view, EURUSD continues to test the 1.04 resistance zone, following an earlier break above the 200-session moving average and a successful retest of this average later on. In case we see a break above 1.04 resistance, the way towards the next potential resistance zone - 1.06 area - will be left open.
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Source: xStation5
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