EUR/USD analysis: Central bankers' inspired rally to extend
|EUR/USD Current price: 1.1331
The EUR/USD pair began rallying early European session, and continues to do so ahead of Wall Street's opening, as the market finally got the excuses needed to move. The common currency got a considerable boost from ECB's head, Mario Draghi, in the European morning, resulting in the EUR/USD pair reaching a fresh 2017 high of 1.1304, accelerating further in the US afternoon and flirting with 1.1340 after Fed's officers hit the wires, its highest since August 2017.
In a speech at an ECB forum on Central Banking, Draghi offered a confident stance on the economic progress of the region, saying that "all the signs now point to a strengthening and broadening recovery in the euro area," but also reaffirmed the need of maintaining QE in place, although hinted the possibility of a sooner-than-expected tapering, noting that the threat of deflation is gone.
In the US, Fed's Harker supported the decision to raise interest rates again this year, even though he predicts prices will take longer to rebound to the Fed's goal revising his prediction on when inflation will reach the 2% target to early 2018 from late this year. Chair´s Yellen has also been on the wires, but her comments were focused on the strength of the banking system, hitting the greenback by reckoning that real income has been stagnant, hurting mostly the middle class.
Technically, the pair is up for over 150 pips daily basis, leaving intraday indicators in extreme overbought territory, but there no signs of upward exhaustion just yet, and given that the pair broke above 1.1300, further gains are likely for the upcoming sessions as long as pullbacks towards the level attract buying interest. In the 4 hours chart, technical indicators have decelerated, but maintain their bullish slopes within overbought territory, with the RSI indicator currently at 80, while far beyond the current level, the 20 SMA accelerated north, crossing above the 100 SMA, another sign of the dominant bullish momentum.
Support levels: 1.1260 1.1220 1.1190
Resistance levels: 1.1300 1.1340 1.1380
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