The European Central Bank held its interest rates at record lows and kept the size of its bond-purchasing programme unchanged, allowing some time for fresh stimulus measures announced last month to affect the economy. The 25-member Governing Council maintained the benchmark rate at zero, the deposit rate at minus 0.4% and asset purchases at 80 billion euros month. ECB President Mario Draghi reiterated that there were still challenges ahead and there is a need to ensure that low inflation does not become entrenched, as the risks to the recovery remained "tilted to the downside". Thus, the monetary policy in the bloc will stay loose, if not looser, in the future. Also, Draghi particularly highlighted emerging market slowdown, subdued public investment and a lack of structural reforms. Additionally, Draghi robustly defended its cheap money policy against brutal a debate that has driven a wedge between the central bank and Germany, the Euro zone's biggest economy. Criticism by politicians in Germany has intensified amid fears that the ECB could even start to hand out 'helicopter money' to citizens. Germans have a right to question the ECB's actions, but the ECB's independence should not be breached, Chancellor Angela Merkel said
Britain's retail sales recorded their biggest monthly decrease in more than two years in March as Britons cut back on food and clothes in the latest sign households are nervous about the economic outlook. The Office for National Statistics said that the UK retail sales fell 1.3% in March compared with February, a much larger fall than expected. The volume of sales excluding auto fuel dropped 1.6% from February, the most since January 2014. The retail sales data is the latest in a series of disappointing data, coming after weak industrial production numbers and the first increase in unemployment in almost a year. Retail sales figures suggest that consumer spending, the driver of recent economic growth, weakened in March amid weak pay growth and a gloomier economic outlook. The ONS also revealed that public-sector borrowing overshot official forecasts in the latest fiscal year and the national debt burden increased. A 4.8 billion-pound budget deficit in March left the full-year shortfall at 74 billion pounds, or 3.9% of gross domestic product. That compares with the 72.2 billion pounds projected by the Office for Budget Responsibility last month. The overshoot means George Osborne will have to find fresh savings in government spending, raise taxes or hope for quicker economic growth to reach his goal of balancing the government books by 2020.
Upcoming fundamentals: PMI data for Euro zone
EUR/USD is range bound after ECB
Although in the beginning of Mario Draghi's conference the pair was moving as high as 1.14, by the end of the session the bears managed to take control over the market and sent EUR/USD even into the red territory. Trading closed at 1.1287 with just a nine-pip daily loss. It seems that undecided trading conditions are here to stay. Within the current rising wedge pattern the bearish scenario is more favourable, as daily technical indicators are also forecasting a slippage. However, we see the 1.12 area being capable of capping bearish ambitions.Pending orders for buying Euro soared yesterday
Spreads (avg,pip) / Trading volume / Volatility
Dukascopy Community members are quite divided on this week's perspectives of the pair
Average forecast says EUR/USD will trade at 1.1160 by July
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between March 22 and April 22 expect, on average, to see the currency pair around 1.1160 by the end of July. Though 60% (+1%) of participants believe the exchange rate will be generally below the 1.12 mark in ninety days, with 43% (+1%) alone seeing it below 1.08. Alongside, 22% of those surveyed reckon the price will trade in the range between 1.12 and 1.18 on July 31.