The euro fell against the U.S. dollar after the decision of the European Central Bank to keep the key interest rates unchanged, as well as, the asset buy-back program.
An important point is a statement saying that the ECB refused its promise to increase bond purchases if necessary when the situation requires. ECB President Mario Draghi repeatedly made hints that the regulator could easily increase the amount of the incentive program, which currently stands at 30 billion euros a month.
It would seem that such statements were supposed to help the European currency, but it is an ineffective attempt to rise and break above the important resistance levels around 1.2445 that led to profit taking among major players and in turn, resulted to the selling of risky assets.
The ECB's statement also shows that the bank raised its forecast for GDP growth in 2018, to 2.4%. The optimism expressed by ECB President Mario Draghi regarding the prospects of the eurozone contradict recent indicators, indicating a slowdown in growth.
Yesterday it also became known that US President Donald Trump signed a decree on the introduction of tariffs for the import of metals. Despite the fact that negotiations on amending the terms of the North American Free Trade Agreement were unsuccessful. Trump set a tariff of 25% on steel imports, 10% on aluminum imports while both Mexico and Canada are exempted from tariffs.
After that, the Mexican peso and the Canadian dollar rose against the US dollar.
During his speech, Donald Trump said that it is easier to change the terms of the North American Free Trade Agreement than to dissolve it.
Even if it is of a political nature, the meeting between two leaders from the Democratic People's Republic of Korea, Kim Jong-un, and U.S. President Donald Trump are good news. Yesterday, a representative of South Korea said that Trump agreed to hold a meeting with the leader of the DPRK in May 2018. The White House also confirmed that President Trump will accept an invitation to meet with Kim Jong-un.
As for the technical picture of the EUR/USD pair, the pressure on the euro will continue as long as the trade is below resistance level of 1.2360. The breakthrough of intermediate support level at 1.2300 will lead to a further sell-off of the trading instrument and an exit to the more significant levels of 1.2270 and 1.2230.
Today, attention should be given to data on the U.S. labor market, which will be released in the afternoon, and may affect the market direction.
It is expected that the number of employees in the non-agricultural sector of the US will grow by 204,000 in February, after its increase of 200,000 in January this year. The unemployment rate may drop to 4.0% from 4.1%.
