Chart of The Week- EUR/USD- Hawkish ECB comments move Euro Higher

EUR/USD – Hawkish ECB comments move Euro Higher

• Resistance Zone: 111.70 to 112.00
• Key Resistance: 110.30
• Major Pivot Point: 109.00
• Key Support Level: 107.70
• Support Zone: 106.50 to 106.20
• 200 Day SMA – Green Line
• 50 Day SMA – Red Line
• CBOE VIX – Volatility Index @ 20.32 -1.05 (-4.91%)

Trade Insights – EUR/USD

The EUR/USD daily chart shows viable long positions above the Key Support Level at 107.70. With the first target of the Key Pivot Point at 109.000. Then the test of the Key Resistance level at 110.30 (Tradingview).

Alternatively, Short positions below the Key Support Level at 107.70 to head towards the Support Zone at 106.50 to 106.20 and then targeting the 105.00 mark.

Chart Analysis:

Directional bias: 2 Weeks - EUR/USD

EUR/USD chart shows that the last break-out attempt was a fake-out and Euro dropped sharply after meeting the resistance Zone on the chart at 111.70 to 112.00 towards the key support level at 107.70 in about the past 10 sessions. EUR/USD pair continues to move in a downward spiral in the descending channel since May 2021. And it would complete a year of the solid downtrend in the next month. Apparently, things are changing as we saw in yesterday’s session. The Euro got a boost from the comments of one of the ECB members on the hawkish outlook of the ECB.

Euro bounced back up after finding support at the lower limit of the descending channel and the key support level at 107.70. Any move higher above the Pivot at 109.00 would confirm that Euro has indeed found its support and a break higher is possible. If the pair breaks above the Key Resistance level at 110.30 which is also the higher limit of the downward channel would move the Euro out of the downtrend and possibly enter an uptrend.

The RSI Indicator shows that the prices are now down to just near 43 points and the pair is trying to make a strong footing here.  The pair is still trading far below the 50-day SMA red line and the 200-day SMA green line. Any move above the midline of the descending channel or the Pivot on the chart at 109.00 could be another attempt to break out of this downward spiral the EUR/USD pair is stuck in for the past year.

Fundamental Overview: 

In an interview with Bloomberg, the ECB Governing Council Member Martins Kazaks said that an interest rate hike is possible in July and this hawkish twist in the ECB meeting has given Euro a boost as Euro is trading at a multi-year Support.

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