The European Central Bank revealed no surprises regarding interest rate decision as all three main interest rates left on hold, in line with majority of economists' expectations. The central bank's main interest rate, remains at a record low of 0%, while the deposit rate, in turn, will stay at minus 0.4%, indicating that commercial banks continue to pay to park funds with the central bank overnight. The market posted minimal reaction to the following news and was mostly concentrated on President Draghi's press conference. During the ECB President press conference it was revealed that there is willingness to take further action if inflation doesn't pick up decisively, however the need for patience is necessary as previously announced stimulus measures take effect. Also, it was stressed out that Central bank would start its corporate bond purchase programme on June 8 and would conduct its first operation in its new series of targeted loans on June 22. Meanwhile, despite a recent increase in oil prices, the ECB's economists revealed positive inflation forecast for this year, as well as left their projections for next year and 2018 unchanged, an indication that further stimulus measures may be needed if policy makers are to meet their inflation target of just under 2%.
Australian retail sales rose modestly in April, led by strength in cafes, department stores and clothing. In a report, Australian Bureau of Statistics stated that Australian retail sales rose to a seasonally adjusted 0.2%, as soft consumer demand, a warm autumn and aggressive discounting took their toll after a relatively strong March. The growth rate compares with a 0.4% increase for March, and fell short of economists' forecasts of 0.3% this time. The Australian Bureau of Statistics reported that turnover at cafes, restaurants and takeaway stores led the way with a 1% increase, followed by clothing, footwear and accessories, with 0.5% growth. However the situation with food retailers, such as supermarkets, appeared to be bad, as sales in this segment were down 0.3% for the month. Meanwhile, a separate research showed that Australia's trade balance rose more-than-expected last month. Australia's trade balance increased to a seasonally adjusted -$1.579 billion, against market expectations of a -$2.11 billion print. That is a fall of $392 million, 20%, from the March deficit of -$1.971 billion whose figure was revised up from -$2.163 billion. Moreover, data showed that exports have risen by 1% and imports have declined by 1%. This is good news that backs up the strong GDP data released yesterday, but yet is a trend that needs to pick up pace if it is to counteract the loss of the mining industry all together.
Upcoming fundamentals: Euro zone's services and composite PMI data
EUR/USD suffers losses on ECB press conference
Daily chart: Yesterday the Euro depreciated against the Greenback in accordance to the established broadening rising wedge pattern, in which it has been trading since December 2015. At the moment the pair is at the 1.1155 mark, which is not too far away from the 200-day SMA at 1.1094 and the lower trend-line. It is possible that the currency exchange rate will rebound against these combined supports and move upwards afterwards. Aggregate technical indicators also predict a downwards trend today for the pair.SWFX sentiment moves to the bearish side
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade at 1.12 by August
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 3 and June 3 expect, on average, see the currency pair around 1.12 by the end of August. Though 53% (-2%) of participants believe the exchange rate will be generally below 1.12 in ninety days, with 31% (-1%) alone seeing it below 1.08. Alongside, only 26% (+2%) of those surveyed reckon the price will trade in the range between 1.12 and 1.18 on August 31.