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Investors Expecting Further Easing by ECB

Market always reacts on the basis of expectations and today EUR have proved that. EURUSD posted gains after the release of the Euro area annual inflation report as investors expects further easing from the European Central Bank. According to the report euro area annual inflation is expected to be .5% in March down from .7% in February missing the economist’s expectation for a decrease to .6%. Core inflation rose .8% in March in line with the economists’ expectations.

On the 4 hour chart of EURUSD, the pair was trading in a falling wedge pattern giving a bullish signal on the pair. The pair broke out the wedge after the release of the inflation data reversing the downtrend to upward trend. The next key resistance the pair might face is at 1.3810.It should move down from this resistance. However if it continues to move up and break this resistance level it will find the next resistance at 1.3832.