[ad_1]
The pair will likely keep rising as bulls target the important resistance at 1.0345.
Bullish View
- Buy the EUR/USD pair and set a take-profit at 1.0345.
- Add a stop-loss at 1.0100.
- Timeline: 1-2 days.
Bearish View
- Set a sell-stop at 1.0120 and a take-profit at 1.000.
- Add a stop-loss at 1.02200.
The EUR/USD price continued its rebound as investors refocused on the upcoming EU inflation data and the ECB interest rate decision. The pair also soared as investors reduced their expectations for the Federal Reserve. It rose to a high of 1.0202, which was the highest point since July 6th of this year.
EU Inflation and Italian Politics
The EUR/USD pair held steady after the European Union reached a deal with Azerbaijan on natural gas. Baku agreed to double the amount of natural gas it sends to the bloc to at leasy 20 billion cubic metres by 2027. The country sold over 8.1 bcm last year. The flow will be made possible through the Southern Gas Corridor that was opened in 2018.
Still, with the crisis in Ukraine continuing, there are concerns about whether Russia will restart gas flows to Europe. The crucial Nord Stream 1 pipeline has been in maintenance in the past few days. In a note on Monday, the International Energy Agency (IEA) warned Europe to dramatically reduce its gas consumption ahead of winter.
Therefore, there is a possibility that EU members will see elevated inflation risks because of the ongoing energy concerns. On Tuesday, Eurostat will publish the latest consumer inflation data for June. Economists expect the data to show that inflation surged to 8.3% in June. Core inflation, which excludes the volatile food and energy products, is expected to have fallen to 3.7%.
The EUR/USD also rose after signs emerged that the Italian government under Mario Draghi will stand. Some important members of the Five Star Movement said that they will defy Giuseppe Conte and support Draghi’s reforms.
Meanwhile, some Fed officials who spoke to the Wall Street Journal said that they were concerned about hiking interest rates by 100 basis points next week. Therefore, there is a likelihood that the bank will hike by 75 basis points.
EUR/USD Forecast
The four-hour chart shows that the EUR/USD pair continued its recovery process during the Asian session. It managed to move above the 23.6% Fibonacci Retracement level. Further, it rose above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) is approaching the overbought level.
The pair will likely keep rising as bulls target the important resistance at 1.0345, which was the lowest point on May 12th of this year.
Ready to trade our free Forex signals? Here are the best Forex brokers to choose from.
[ad_2]