EUR/USD sees recovery to near 1.0900 as ECB to continue rate hikes beyond summer


Share:
  • EUR/USD is eyeing to recapture the 1.0900 resistance as ECB might not pause policy tightening beyond summer.
  • The Euro is delighted with bullish bets for CY2023 as the ECB will continue to raise interest rates further.
  • According to the consensus, investors should brace for a contraction in the US GDP for the fourth quarter of CY2022.

The EUR/USD pair aims for a recovery extension to near the critical resistance of 1.0900 as the odds of hawkish European Central Bank (ECB) bets are soaring dramatically. The major currency pair is looking to extend its upside journey further as the ECB's expectations of the continuation of policy tightening beyond summer have strengthened.

Earlier, ECB President Christine Lagarde and other policymakers stated that the central bank would reach an interest rate peak by the end of summer at 3.25%.

As reported by Bloomberg, ECB policymaker Gediminas Simkus said on Tuesday that the ECB should continue with 50 basis points (bps) rate hikes amid growing wage pressures. Simkus added that reaching the peak policy rate before summer 'may be unlikely' and noted that the strong core Consumer Price Index (CPI) shows that their battle against inflation is not over yet.

Meanwhile, the street has started delivering bullish projections for the Euro for CY2023, considering that the ECB will continue raising interest rates further. According to economists at CIBC Capital Markets, “The improved macro backdrop comes as the ECB now details that ‘rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive to ensure a timely return of inflation to the 2% medium-term target.’’

The market mood seems neutral as S&P500 remained choppy in Tuesday’s trade ahead of the United States Gross Domestic Product (GDP) data. However, weakness in the 10-year US Treasury yields to near 3.45% and in the US Dollar Index (DXY) to 101.50 support indicate that the risk-perceived currencies could remain in a positive trajectory ahead.

According to the consensus, the annualized GDP is seen lower at 2.8% vs. the prior release of 3.2%. An expression of a contraction in overall economic activities might accelerate recession fears in the United States.

EUR/USD

Overview
Today last price 1.0887
Today Daily Change 0.0019
Today Daily Change % 0.17
Today daily open 1.0868
 
Trends
Daily SMA20 1.0724
Daily SMA50 1.0582
Daily SMA100 1.0241
Daily SMA200 1.031
 
Levels
Previous Daily High 1.0927
Previous Daily Low 1.0846
Previous Weekly High 1.0888
Previous Weekly Low 1.0766
Previous Monthly High 1.0736
Previous Monthly Low 1.0393
Daily Fibonacci 38.2% 1.0896
Daily Fibonacci 61.8% 1.0877
Daily Pivot Point S1 1.0834
Daily Pivot Point S2 1.08
Daily Pivot Point S3 1.0754
Daily Pivot Point R1 1.0915
Daily Pivot Point R2 1.0961
Daily Pivot Point R3 1.0995

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD holds above 1.0700, eyes on Powell

EUR/USD holds above 1.0700, eyes on Powell

EUR/USD edged lower toward 1.0700 in the early European session but managed to hold above that level. As investors await speeches from ECB officials and FOMC Chairman Jerome Powell, the pair struggles to make a decisive move in either direction.

EUR/USD News

GBP/USD falls to fresh monthly low below 1.2000

GBP/USD falls to fresh monthly low below 1.2000

GBP/USD came under renewed bearish pressure and touched its lowest level in a month below 1.2000 on Tuesday. Despite the modest improvement witnessed in risk mood, the US Dollar holds its ground and weighs on the pair as focus shifts to FOMC Chairman Powell's speech.

GBP/USD News

Gold retreats below $1,870 as US yields rebound

Gold retreats below $1,870 as US yields rebound

Gold price erased its daily recovery gains and turned flat slightly below $1,870 heading into the American session. Following a downward correction earlier in the day, the benchmark 10-year US Treasury bond yield staged a rebound and caused XAU/USD to turn south ahead of FOMC Chairman Powell's speech.

Gold News

Will Bitcoin price test $20,000 again?

Will Bitcoin price test $20,000 again?

Bitcoin price shows clear signs of distribution occurring on the four-hour chart, which indicates the possibility of a trend reversal. Moreover, BTC has been consolidating for more than two weeks with no direction in sight.

Read more

Central banks, markets and the economy: Three times wrongfooted

Central banks, markets and the economy: Three times wrongfooted

In the US, financial conditions have eased in recent months and weighed on the effectiveness of the Fed’s policy tightening. Jerome Powell recently gave the impression of not being too concerned, so markets rallied.

Read more

Forex MAJORS

Cryptocurrencies

Signatures