EUR/USD Forex Signal: Break And Retest To Push It To 0.9876| MENAFN.COM

Tuesday, 06 December 2022 12:53 GMT

EUR/USD Forex Signal: Break And Retest To Push It To 0.9876


(MENAFN- Daily Forex) Advertisement Bullish view

  • Buy the pair and set a take-profit at 0.9876.
  • Add a stop-loss at 0.9650.
  • Timeline: 1-2 days.
Bearish view
  • Set a sell-stop at 0.9650 and a take-profit at 0.9535.
  • Add a at 0.9750.

The EUR/USD price continued its recovery during the Asian session as the market sentiment improved. It rose to a high of 0.9731, which was the highest point since Monday. It has risen by almost 2% from its lowest level this week.ECB and Fed hawkish tone

The EUR/USD pair continued rising after several European Central Bank (ECB) officials sounded upbat about rate hikes. In a statement, Christine Lagarde said that the bank could raise rates by 0.75% for the second straight month. She also hinted that the bank will hike by either 0.50% or 0.75% in December.

The same view was shared by several ECB officials who were addressing a session by the Atlantic Council. Peter Kazimir of Slovakia and Austria's Robert Holzmann said that 0.75% was a good candidate. As a result, European bond yields rose as expectations that the ECB will hike rates to above 3% next year. Goldman Sachs analysts expect two 0.75% hikes this year.

Still, the challenge for the ECB is that most analysts expect that the European economy will sink to a recession as energy costs surge. While most countries have ample gas supplies for winter, the cost of gas prices will likely keep rising in the coming months.

The EUR/USD pair also rose after more hawkish statements by officials. In a statement, Raphael Bostic said that the bank will likely hike rates by 0.75% in the upcoming meeting. This is in line with what other Fed officials like Mary Daly and Susan Collins, the new head of Boston Fed.

There will be some important data from the EU and US on Thursday although their impact on the pair will be limited. In the US, the statistics agency will publish the latest GDP and initial jobless data. In Europe, the key data to watch will be the preliminary German and Spanish inflation numbers.EUR/USD forecast

The EUR/USD pair made a strong recovery in the overnight session. It managed to move from a low of 0.9540 to a high of 0.9731, which was the highest point since September 23. The pair is approaching the first support of the standard pivot point.

It has also moved above the 25-day while the MACD has formed a bullish crossover pattern. Therefore, the pair will likely continue rising as buyers target the key resistance at 0.9876, which was the lowest level on September 6. This is part of a break and retest pattern.

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