EUR/USD meets solid support around 1.1000 on Lagarde

• EUR/USD loses some ground and revisits 1.1000.
• Lagarde said inflation pressures remain strong.
• Many Board members suggested a 50 bps rate raise.

EUR/USD accelerates the corrective decline and probed the boundaries of the key 1.1000 the figure on Thursday, where solid contention appears to have emerged.

EUR/USD: Gains remain capped by 1.1100 so far

EUR/USD comes under pressure and faces some increased volatility as Chairwoman Lagarde’s press conference is under way on Thursday.

So far, the pair probed once again the boundaries of the 1.1100 barrier just to give away all those gains and poke with the 1.1000 neighbourhood, managing to stage a rebound afterwards.

At her press conference, Chairwoman C. Lagarde argued that price pressures remain strong, while services prices are pushed up by pent up demand amidst a strong growth in the sector vs. worsening prospects for the manufacturing sector.

Lagarde also noted that there are still significant upside risks to inflation, which remain bolstered by energy and supply bottlenecks, while wage pressure have gathered further traction as of late.

Lagarde reiterated that the bank maintains a meeting-by-meeting approach when it comes to decide on the next moves on rates as well as the performance of inflation and key fundamentals.

At the Q&A session, Chair Lagarde stressed that all participants agreed that more tightening was needed, while many of them even leant towards a 50 bps hike. She added the bank still has further work to do in terms of reaching a sufficiently restrictive stance.

EUR/USD levels to watch

So far, the pair is down 0.17% at 1.1040 and faces the next support at 1.0941 (monthly low May 2) followed by 1.0909 (weekly low April 17) and finally 1.0831 (monthly low April 10). On the other hand, the surpass of 1.1095 (2023 high April 26) would target 1.1100 (round level) en route to 1.1184 (weekly high March 21 2022).