2023-06-19 09:32:55
In the upward trend
Trade BUY EURUSD and set Take Profit at 1.100. Set Stop Loss at 1.090.Schedule: 1 day.
In the case of a downward trend
Set Sell Stop at 1.0910 and Take Profit at 1.0860. Set Stop Loss at 1.1025.
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The exchange rate of the EUR/USD currency pair jumped sharply last week following the European Central Bank (ECB) and the Federal Reserve took divergent decisions. The pair jumped to a high of 1.0962, the highest point since May 23rd. It is up nearly 3% from the lowest point this month.
The EURUSD rose once morest the US dollar following the US Consumer Price Index (CPI) data and the latest Federal Reserve decision. Data from the Bureau of Labor Statistics showed that inflation in the country fell to 4.0%, the lowest level since 2021. Core inflation fell slightly to 5.3%.
The pair also reacted moderately to the interest rate decision by the Federal Reserve. In it, the bank decided to leave interest rates unchanged between 5.0% and 5.25%. It was the first time in 10 meetings that the Bank left interest rates unchanged.
Another important driver of the EURUSD currency pair trading was the interest rate decision by the European Central Bank (ECB). Unlike the Fed, the European Central Bank decided to raise interest rates by 0.25%. It raised interest rates to 3.5%, the highest level since 2001, and hinted that inflation would rise faster than expected.
In a statement, Christine Lagarde warned that a strong labor market risks leaving inflation above its 2% target through 2025. Analysts read the statement to mean that the Bank will continue to raise interest rates in the next few meetings.
The performance of EURUSD will be muted on Monday as US markets will be closed for the June holiday. There will also be no major economic data from the US and the Eurozone. Looking ahead, the main data to watch this week will be US building permits, home construction, and existing home sales.
The pair will also react to statements from Federal Reserve officials such as Jerome Powell, Loretta Mester and Tom Barkin.
EURUSD has been in a strong bullish trend following bottoming out at 1.0635 in May. It has surpassed the major resistance at 1.0828, the high of May 22nd. It also turned the important resistance at 1.0828 into support.
The EUR/USD is moving below the 25-day and 50-day moving averages, which is a bullish sign. At the same time, the RSI rose and formed a bullish wedge pattern. 1.1000 will be the main resistance to watch while 1.0908 will be the support on Monday.
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