The minutes of the March meeting of the ECB were dominated by a cautious tone and an indication of the risks for the economic outlook. It was noted that the removal of the dovish attitude from forwarding guidance regarding the asset purchase program "should not be misunderstood" and the Council still leaves the option of reacting to potential shocks. There is "broad agreement" that there is insufficient evidence of stabilizing inflation trends. The general tone of the document suggests that the ECB has no strong arguments for speeding up policy standardization, but seriously analyzes the risks. Thus, the report is in sharp contrast to the hawkish comments of ECB member Ewald Nowotny from three days ago. "Short squeeze" on EUR cross from Tuesday does not find justification in ECB Minutes, and in combination with a series of weak data from the Eurozone (like today's industrial production), more convincing might be a negative market reaction today.
Let's now take a look at the EUR/USD technical picture in the H4 time frame. The 61% Fibo at the level of 1.2380 was too much for the bull camp, therefore the price dropped towards the technical support at the level of 1.2290 and since then is trading in a tight consolidation zone of 1.2314 - 1.2346. The momentum is neutral, which support the short-term sideways outlook for this pair. In a case of a further breakout to the upside, the next technical resistance is seen at the level of 1.2400 and the nearest important technical support is still seen at the level of 1.2290.
