Euro fell in price even though ECB President Christine Lagarde reportedly promised to keep interest rates at a high level for quite some time. However, what she actually said was that interest rates will just continue to be largely restrictive this time, and it will be lowered if inflation goes down. Considering the slowing pace of consumer price growth, it is likely that Lagarde actually warns of an upcoming easing of monetary policy.
Going back to euro, it is now heavily oversold, and a correction has long been anticipated in the market. This may happen today, especially amid the empty macroeconomic calendar.
After a brief consolidation, the volume of short positions surged in EUR/USD, resulting in a prolonged downward trend. Staying below the level of 1.0600 will likely trigger a further decline to 1.0500.
Meanwhile, GBP/USD dropped below 1.2200, indicating speculative sentiment among market participants. Although signals point to pound's oversold conditions, traders may ignore it.
