The European Central Bank refrained from any bold measures or hints, keeping its interest rates at all-time low of 0.05%. The ECB Governor Mario Draghi said that the governing council will assess early next year whether its current measures are sufficient to bring consumer prices toward its official goal of below but close to 2%, and noted the sharp drops in oil prices may make that objective more difficult to achieve. Outlining new, lower economic growth and inflation outlook over the coming two years, Draghi stressed that in case the council decide its policies are not enough to end a period of disinflation, that would "imply altering the size, pace and composition of our measures."
Since June, the ECB has slashed interest rates twice, offered cheap loans to banks to boost lending and began purchase programs for covered bonds and asset-backed securities. With the Euro zone's inflation well below the ECB's target, Draghi warned of a deflationary spiral of declining prices and households postponing spending. The ECB now expects the 18-nation economy to grow 0.8% this year, 1% in 2015 and 1.5% in 2016. It projects consumer prices will rise 0.5% in 2014, 0.7% next year and 1.3% in 2016. Draghi highlighted downside risks from falling oil prices on inflationary pressures within the Euro zone.
Monday to bring no major news from Eurozone
Usually, the beginning of the week is rather calm in terms of any fundamental data. The same situation will not be an exception for the next Monday as well. The only data released will include German industrial production. In addition to that, there is a scheduled Eurogroup meeting in Brussels, which may have some minor impact on the single currency, but no considerable movements are expected.EUR/USD set for decline after confirmation of triangle pattern
The long-term outlook for the EUR/USD remains bearish, as the cross has been moving downwards since the beginning of July and on December 3 has eventually breached the triangle pattern to the south. Moreover, it has reached a new 2014 low at 1.2278. Any negative impetus will push the cross down below this important level, with a long-term goal at 1.2098 (monthly S3). At the same time, right now the pair is also limited by the monthly pivot point at 1.2468 from the upside.Daily chart
Having a look at the hourly chart, the EUR/USD currency pair has jumped considerably during the trading session on Thursday, just after Mario Draghi's comments on the QE. The shared currency surged above the weekly PP and reached the daily high at 1.2455. However, towards the end of the day it consolidated above the weekly S1 around 1.2380. Today, we predict the pair to hover around this level and wait for the next strong impetus.
Hourly chart