The Euro-Dollar flat on a weekly basis as investors remained cautious ahead of the highly anticipated European central bank meeting on Thursday. The central bank is expected to keep monetary policy unchanged, but the investors are looking forward to the ECB president Christian Lagarde press conference. The currency pair returned to near the 1.2200 price zone on Wednesday despite poor German economic data.
The key topic of discussion at this week ECB meeting going to be the current inflation pressures. The latest data showed the Eurozone inflation increased by 2% in May, up from 1.6% in April, the increase was largely driven by volatile energy prices. The 2% inflation rate reaches the upper limit set by the European Central Bank while the central bank has constantly argued that any increase in prices will be transitory.
Technically, the overall momentum remains bullish supported by broad dollar weakness. On the downside, the immediate support will be the same as last week low 1.2100, below which the slide could further get extended towards 1.2070 then 1.2050/00. On the flip side, the immediate resistance is seen at 1.2220 any break above this level will open 1.2250/65.
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