EUR/USD Forecast: Upward Momentum After ECB Meeting

Date

6/16/2023 2:19:19 PM

(MENAFN- Daily Forex)

The eur/usd experienced a significant surge during Thursday's trading session, breaking past the crucial 1.09 level.
This level has been a focal point for many market participants, and the swift breach above it suggests that the euro is poised for a strong upward trajectory.
It's worth noting that the European Central bank proceeded with an anticipated interest rate hike, while the federal Reserve decided to hold off.

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In a surprising development, Jerome Powell, the federal reserve Chair, hinted on Wednesday that the Federal Reserve is considering at least two more interest rate hikes. This raises questions about the longevity of the euro's current rally. The situation is likely to generate a considerable amount of market noise, but the current trajectory suggests a direct path towards the 1.10 level. The 50-Day Exponential Moving Average is expected to provide support, aligning closely with the lower limit of Thursday's trading range. This level could attract value investors.

The recent breakout from the previous consolidation area, which coincided with the 200-Day EMA and the trend line, appears to be part of a bounce within the same trading channel we've been observing.The Market is Likely to Attract Buyers

If the market manages to surpass the 1.10 level, it's highly probable that the euro will continue its ascent, potentially signaling a pause in the US dollar's strength. However, it's important to bear in mind that the market is likely to exhibit significant volatility in the coming days. It will be intriguing to see if risk appetite re-enters the equation. A decrease in risk appetite could potentially drive funds back toward the US dollar, but at present, it seems the market is inclined to overlook negative factors.

On the other hand, the market appears to be somewhat overstretched at this point. Despite this, given the market's history of high volatility, it's likely that we'll continue to see significant fluctuations in the future. Consequently, it seems inevitable that a pullback will occur at some point. However, I anticipate that such a pullback will attract a substantial number of buyers.

At the end of the day, the euro's performance during Thursday's trading session was marked by a significant rally, breaking past the crucial 1.09 level. This, coupled with the ECB's decision to raise interest rates, suggests a strong upward trajectory for the euro. However, the market is likely to exhibit significant volatility in the coming days, and it remains to be seen how risk appetite will influence the market. Despite the potential for a pullback, the market is likely to attract a substantial number of buyers, indicating continued interest in the euro.

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