The ECB delivered its verdict and the monetary authorities' decision surprised the market. The discount rate was reduced to 0%, the QE program was immediately increased to 20 billion. The ECB significantly lowered the inflation forecast for this year from 1% to 0.1%. The GDP estimates for the period of 2016-2018 were also revised. Monetary authorities noted inflationary pressure contraction, however, they rejected the possible threat of deflation.
The first support lies at 1.1150 and then at 1.1050. The first resistance stands at 1.1260, the next one is at 1.1350.
There is a confirmed and a strong buy signal. The price is above the Ichimoku Cloud and it is above the Chinkou Span. The Tenkan-sen shows an upward movement, the Kijun-sen shows a horizontal movement forming a “Golden Cross”. The upward movement will be continued until the pair is above the Cloud.
The MACD indicator is in a positive territory. The price is growing.
We support the growth idea. The first target is the level of 1.1260. Breaking of 1.1260 shall open the way to 1.1350. We still do not exclude the correction to 1.1050.