Global macro overview for 20/01/2017:
The European Central Bank left the interest rates unchanged yesterday at the level of 0.0%. At the press conference that followed the interest rate decision, the ECB President Mario Draghi said, that the Eurozone's economic growth is unlikely to gain momentum and it still remains subdued. The main reason for this statement was the lack of structural reforms and bad fiscal policy that is not supporting the Eurozone's economic recovery. Nevertheless, Draghi said he expects the inflation to pick up in the coming months (mainly driven by the energy prices) and he hopes the core inflation will increase in the medium term as well. In conclusion, the interest rate decision was unchanged as widely expected and the press conference tone was mildly-hawkish, especially regarding the inflation expectations. Overall, nothing new from ECB at this meeting for market participants.
Let's now take a look at the EUR/USD technical picture in the 4H time frame. The bulls have managed to push the price higher to the level of 1.0719, just below the weekly pivot resistance at the level of 1.0742. The golden trend line is still providing support, but the characteristic of this move up looks more corrective than impulsive. As long as the golden trend line is not clearly violated, the bulls will still try to push the price higher.The next important resistance is seen at the level of 1.0874 and the next support is seen at the level of 1.0598.
