Euro hawk returns, greenback bruised.
“Lagarde indicates that negative interest rate may likely be gone by end of summer.”
Greenback extended its losses, hovering near one-month low after European Central Bank President Christine Lagarde delivered hawkish signal on yesterday. Lagarde commented that euro-zone interest rates may be tweaked to positive territory by the end of third quarter. Her comment was a significant departure from prior dovish tilt to keep monetary policy accommodative. Likewise, it also imply possible interest rate hike with at least 50 basis points in the coming months to combat stubbornly high inflation due to Russia-Ukraine conflict.
Quick recap on EURUSD
Euro halted its decline, stabilizing near 1.0381 as the pair stages a possible extension towards the upside.
EURUSD Weekly Technical Analysis
In weekly chart, the pair is looking to extend its bullish momentum, with the next hurdle at around 1.0849.
EURUSD Daily Technical Analysis
In daily chart, the pair will be subjected to downward trendline, with its key point lying near 1.0849. Thus, we will require a confirmatory break above the level before looking forward for more upside ahead.
Trading idea
ORDER: BUY STOP
ENTRY: 1.0900
STOP LOSS 1.0750
Target 1: 1.1075
Target 2: 1.1160
ZFX Analyst’s Comment
Market sentiment may undergo changes in the near-term as more central bank pledge to raise interest rates to curb rising inflation. This will take away the limelight from Federal Reserve who may initiate two more 50 basis point rate hike in the coming months.
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