During this time the 1.0750 level was also offering solid support, as the EURUSD did well to consolidate in this range, having previously dropped surged back higher from a three year low near 1.06 to up above the key 1.11 level in the second half of May, before easing back below 1.10 again.
The EURUSD may experience some resistance from the previous peak around 1.15 from early March as it does well to climb higher, as it may also receive some support from the 1.13 level. In the middle of March the EURUSD fell sharply from its highest level in more than 12 months above 1.15 down to near 1.06 before rallying strongly in the week after, before easing below 1.10 in early April. Before the fall from 1.15, it had moved very strongly from a then three year low around 1.08.
Most of the levels including 1.10, 1.11 and 1.12 have played a significant role in the last six months or alternating between providing support and resistance, and continue to do so. The 1.10 level has propped up the currency pair many times in the last 12 months and may be called upon again should the EURUSD decline further. The EURUSD had moved strongly to close out last year and into the new year moving to a five month high near 1.1250, before easing back into the range.
In the latest monetary policy decision from the European Central Bank (ECB) to help support the severe economic impacts of the coronavirus, many banks have been quick to take up an offer to borrow a combined 1.3 trillion euros, at negative interest rates. Introducing a tiered rate system, the central bank is the first to offer multiyear loans to banks at an interest rate below its main deposit rate. More than 700 banks across 19 countries have applied to borrow money from the ECB under this finance program, which will allow banks to borrow at rates as low as minus one percent up to three years. Under the negative rates, the ECB is actually paying the banks to borrow the money. Alongside this unprecedented borrowing arrangement, the central bank is already undertaking its pandemic bond purchase program, which is pouring 1.35 trillion euros in new money into the economy. This is similar to other measures undertaken by other central banks around the world including the U.S. Federal Reserve. The Bank of England recently increased its bond-purchase stimulus by a further 100 billion pounds.
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