• EUR/USD trims initial gains and drops to the 1.0970/60 band.
• ECB raised rates by 50 bps, as broadly expected.
• Market participants now look at Lagarde’s press conference.

The buying bias in the European currency run out of further steam and forced EUR/USD to return to the negative ground after climbing as high as the 1.1030 zone earlier in the session.

EUR/USD now focuses on Lagarde’s presser

EUR/USD now trades with humbles losses after the ECB matched estimates and raised the policy rate by half percentage point at its meeting on Thursday.

Indeed, the central bank raised the interest rate on the main refinancing operations, the interest rate on the marginal lending facility and the deposit facility to 3.0%, 3.25% and 2.50%, respectively.

The ECB reiterated that further rate hikes remain on the cards – with another 50 bps “scheduled” at the March gathering - and the decision on future rate raises will remain data-dependent and in a meeting-by-meeting approach.

Moving forward, market participants will now closely follow the usual press conference by Chairwoman Lagarde and the subsequent Q&A session.

EUR/USD levels to watch

So far, the pair is retreating 0.05% at 1.0982 and the breakdown of 1.0802 (weekly low January 31) would target 1.0766 (weekly low January 17) en route to 1.0639 (55-day SMA). On the flip side, the next up barrier emerges at 1.1032 (2023 high February 2) followed by 1.1100 (round level) and finally 1.1184 (weekly low March 31 2022).