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Market Outlook
Euro hawk returns, greenback bruised. - Zeal Capital Market

Euro hawk returns, greenback bruised.

25-05-2022 02:57

“Lagarde indicates that negative interest rate may likely be gone by end of summer.”

Greenback extended its losses, hovering near one-month low after European Central Bank President Christine Lagarde delivered hawkish signal on yesterday. Lagarde commented that euro-zone interest rates may be tweaked to positive territory by the end of third quarter. Her comment was a significant departure from prior dovish tilt to keep monetary policy accommodative. Likewise, it also imply possible interest rate hike with at least 50 basis points in the coming months to combat stubbornly high inflation due to Russia-Ukraine conflict.

Quick recap on EURUSD

Euro halted its decline, stabilizing near 1.0381 as the pair stages a possible extension towards the upside.

EURUSD Weekly Technical Analysis

Euro hawk returns, greenback bruised. - Zeal Capital Market

In weekly chart, the pair is looking to extend its bullish momentum, with the next hurdle at around 1.0849.

EURUSD Daily Technical Analysis

Euro hawk returns, greenback bruised. - Zeal Capital Market

In daily chart, the pair will be subjected to downward trendline, with its key point lying near 1.0849. Thus, we will require a confirmatory break above the level before looking forward for more upside ahead.

Trading idea

Euro hawk returns, greenback bruised. - Zeal Capital Market

ORDER: BUY STOP

ENTRY: 1.0900

STOP LOSS 1.0750

Target 1: 1.1075

Target 2: 1.1160

ZFX Analyst’s Comment

Market sentiment may undergo changes in the near-term as more central bank pledge to raise interest rates to curb rising inflation. This will take away the limelight from Federal Reserve who may initiate two more 50 basis point rate hike in the coming months.

Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.

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