EUR/USD towards the 1.1911 year-high fueled by hawkish Lagarde

The EUR/USD pair is up this Thursday, trading around 1.1890 as ECB’s Lagarde speaks. Easing dollar’s demand alongside an on-hold ECB is backing the shared currency. EUR/USD is heading towards the yearly high at 1.1911, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“Words from the ECB´s head are hawkish, as suspected after yesterday’s rumours. Despite persistent uncertainty, Lagarde started her speech mentioning a strong rebound in macroeconomic activity, although noting that it’s still below pre-pandemic levels and adding that ample accommodative support is needed.”  

“Among other things, Lagarde referred to the exchange rate, saying that policymakers will carefully assess developments, including it. Also,  the Governing Council has reportedly agreed that there is no need to overreact to euro gains, boosting the pair.”

“The US published Initial Jobless Claims for the week ended September 4, which came in at 884K, worse than anticipated. The country also published August PPI which beat expectations but remained in the red at -0.2% YoY.”

“The 4-hour chart shows that the EUR/USD pair has broken above all of its moving averages, while technical indicators head firmly higher within positive levels. The 61.8% retracement of its latest daily slump comes at 1.1910, the immediate resistance level. A break above this last would open doors to a retest of the year high at 1.2011.”