EUR/USD Analysis: Hawkish ECB commentary-led short-covering rally stalls ahead of 38.2% Fibo. by HareshMenghani eurusd ecb
GDP, showing that the economy expanded by 0.3% in Q1 as against 0.2% estimated initially, also acted as a tailwind for the common currency.
In fact, the markets seem convinced that the US central bank would need to take more drastic action to bring inflation under control. The bets were reinforced by Fed Chair Jerome Powell's remarks at a Wall Street Journal event, saying that he will back interest rate increases until prices start falling back toward a healthy level.
On the flip side, the 1.0500 psychological mark, nearing the 23.6% Fibo. level now seems to protect the immediate downside. Any further decline below the 1.0480-1.0475 region could attract some buying and remain limited near the 1.0425-1.0420 horizontal support. A convincing break through the latter would shift the bias back in favour of bearish traders and make the EUR/USD pair vulnerable to slide back below the 1.0400 mark. Bears might eventually aim to challenge the YTD low, around the 1.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
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