EUR/USD Posts Weekly Gain in the Fed and ECB Aftermath
2023.06.16 13:44
The pair reached a fresh one-month high on Friday and is headed to post its second weekly advance in a row following the (Fed) and the (ECB) decisions on monetary policy.
At the time of writing, the EUR/USD pair is trading at the 1.0925 area, slightly down on the day but on track to post a 1.7% weekly advance.
On Thursday, the European Central Bank (ECB) announced its decision to raise its main rates by 25 basis points and offered a hawkish stance as President Christine Lagarde said the board is “not thinking about pausing.”
A day before, the Federal Reserve decided to skip a rate increase but kept the hawkish rhetoric, diminishing prospects of rate cuts for the remainder of the year. Next week, Powell will testify before the US Congress.
Overall, the euro benefited from the central banks’ aftermath, rising over 100 pips over the last two days.
From a technical perspective, the EUR/USD pair holds a short-term bullish bias, according to indicators on the daily chart, giving no signs of exhaustion yet. At the same time, the price is closing the week above its main moving averages. The outlook is also bullish on the weekly chart, although indicators show tamer momentum.
On the upside, the EUR/USD pair could face the next resistance level at 1.0970 and 1.1000 ahead of April and May’s monthly highs at the 1.1095 zone. On the other hand, supports are seen at the 100-day simple moving average (SMA) at 1.0805 and the 20-day SMA at 1.0760. Loss of this level would expose the 1.0700 level.
