![]() With bullish momentum on its side, EUR/USD may soon retest its May peak near 1.1090, but further gains may be in store on a push above this technical resistance, with the next upside target located around the psychological 1.1200 level.Ĭonversely, if EUR/USD fails to sustain this past week’s breakout and sinks below support stretching from 1.0915 to 1.0875, sellers may regain the upper hand, paving the way for a pullback toward 1.0790/1.0755. That said, the chart below shows two key bullish events worth highlighting: 1) the pair has recaptured the trendline that has guided it higher since September of last year, and 2) the exchange rate has reclaimed its 50-day simple moving average. Against this backdrop, it would not be surprising to see EUR/USD continue to rise and challenge its 2023 highs soon.ĮUR/USD’s outlook has turned more constructive following recent price action. Higher underlying inflation could translate into a more restrictive monetary policy stance over the forecast horizon, even if the central bank is not yet ready to endorse that view.Īll in all, the stars seem to align for further euro strength in the very near term. On the other side of the equation, sentiment surrounding the euro has started to become more positive again, especially after the ECB noted that it is “very likely” that it will deliver another hike next month and marked up its core CPI projections for 2023, 20. Treasury yields from repricing higher, biasing the U.S. However, there are no major economic reports that could offer valuable insight into the outlook in the coming days, so traders may stay true to their convictions for now. Market expectations are unlikely to converge towards those of the Fed unless incoming data confirms that the U.S.
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