The European currency completely ignored the decision of the European Central Bank on interest rates as well as good data for Germany that indicated positive economic activity.
According to the report, the strengthening of the German economy and the labor market allows us to look with optimism at the future of consumers. Today, the German Institute of GfK published such data.
Thus, the leading consumer confidence index for February 2018 increased to 11.0 points against 10.8 in January. Economists had expected the index for February to be at 10.8 points. The Gfk statement says that consumers are showing an optimistic start in 2018 due to economic growth.
The German business climate index also increased.
According to the Institute of Ifo, the index of sentiment in business circles was at 117.6 points in January 2018 against 117.2 points last December 2017. Economists had expected the index to drop to a level of 117.0 points.
As noted in the report, the growth was due to support from a large volume of orders in the manufacturing sector. Capacity utilization in the manufacturing sector has also grown significantly.
In the afternoon, it became known that the European Central Bank left the refinancing rate unchanged at the level of 0.0%. The deposit rate was also left unchanged at a negative level of -0.4%.
The ECB expects the key rates to remain at current levels for a long period of time. As for the asset repurchase program, it will last until the end of September at a set amount of 30 billion euros. If there is a need, the QE will be extended further. It was also announced that the Governing Council is prepared to increase QE volumes in the event of a worsening of prospects.
As for the technical picture of the EURUSD pair, the further upward movement, as it was noted in the morning review, will entirely depend on the investor sentiment after European Central Bank President Mario Draghi speaks at the press conference. Only a break above 1.2490 will allow the formation of a new major upward position in risky assets, which will lead to further growth and renewal of already highs such as 1.2530 and 1.2570. In case of disappointment of investors from ECB statements, euro purchases can be sought after correction in the support area of 1.2330 and 1.2260, where large players will return to the market again.