Sat, June 15, 2024

EUR/USD at 1.0895 Amid Bullish Trend and ECB Rate Cut

Prospects Of Russian-Ukraine Confrontation, The Euro's Gains (EUR/USD)

Quick Look:

  • EUR/USD is trading at 1.0895. Bullish signals above the 100-period EMA and RSI.
  • ECB cut rates by 25 bps; no further cuts are expected in July.
  • Market sentiment is positive; high volatility is expected with the jobs report.

As of the early European session on Friday, the EUR/USD pair is trading at 1.0895. The chart displays a positive outlook, remaining above the 100-period Exponential Moving Average (EMA), with the Relative Strength Index (RSI) showing a bullish trend. This combination of technical indicators suggests that the pair might continue its upward momentum if it stays above these crucial levels.

EUR/USD Above 100-Period EMA, RSI Bullish

The resistance levels for EUR/USD start at the range of 1.0900 to 1.0905, the immediate level traders are keenly observing. Moving higher, the next significant resistance is at 1.0940, marking the high observed on March 21. Beyond this, 1.0964, the peak on March 13, stands as another critical barrier. Finally, the resistance level of 1.0981 corresponds to the high reached on March 8, indicating strong resistance points ahead.

On the support side, 1.0860 is a confluence of the low from June 6 and the lower limit of the Bollinger Band, providing a robust support zone. The 100-period EMA at 1.0846 offers another solid support level. Further down, the low recorded on May 31 at 1.0811 represents an additional support level. These support levels are essential for traders to watch, indicating potential buying zones if the price dips.

ECB Cuts Rate by 25 Bps, Stabilises EUR/USD

The European Central Bank (ECB) recently announced a 25 basis point (bps) rate cut during its June meeting on Thursday. Despite this move, the market does not anticipate further rate cuts in July. This decision has supported the Euro against the US Dollar, helping stabilise the currency pair in the short term. The ECB’s actions are crucial as they influence market sentiment and trading decisions.

EUR/USD Positive, ECB’s Commentary Uncertain

The general market sentiment remains positive for the second consecutive day. However, the ECB’s recent commentary has been perceived as confused and evasive. During the press conference, the ECB provided indecisive statements regarding future actions, leading to low confidence among investors. The major resistance level remains at 1.09, while the short-term support is around 1.08, both critical for future price movements.

EUR/USD Targets 1.10, High Volatility Expected

Despite the recent rate cut, the market will likely consolidate, resulting in noisy trading behaviour. The critical level to monitor is 1.09, a significant resistance barrier. Should the price break above this level, the next potential target would be 1.10. Conversely, the short-term support level to watch is 1.08. With the upcoming jobs report on Friday, market will experience high volatility. This analysis highlights the key technical levels and market conditions influencing the EUR/USD pair, providing a comprehensive outlook for traders and investors.

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