The euro is gaining ground on other major currencies during the start of Friday’s trading session. The single currency found support after yesterday’s ECB monetary policy committee meeting during which ECB president, Christine Lagarde, stated that the current asset purchase program – totalling €1.85 trillion – remains flexible, meaning it may not all be used, or it could increase should circumstances require it to. Lagarde managed to navigate the press conference without triggering any alarm bells, with the flexible yet measured stance of the central bank maintaining the confidence of the markets in the prospects of the single currency, despite the pandemic and a looming double-dip recession triggered by the resurgence of the virus in the euro-zone.
European equity markets drifted lower on Friday, following a global trend after mounting virus-related fears hit sentiment at the end of the week. The recent market euphoria fed by further stimulus plans and corporate results, peaked on Thursday as Joe Biden’s inauguration as President pushed US markets to record highs. Following that it seems most investors now feel the party is over and are back to the reality of the pandemic, after the situation worsened in many countries.
Technically speaking, this return to the “risk-off” mood can be seen on most charts as a “bull-trap” situation yesterday, after many benchmarks briefly edged higher than their major resistance level before collapsing again inside their short-term consolidation patterns.
Even if the market correction is sharp, there is no real threat to the long-term bullish trend as no major supports have been broken yet. Investors may be tempted to put the rally on hold by taking some profit ahead of the weekend, but the lack of a strong bullish market reaction next week could lead prices to a deeper correction.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.