Daily Analysis EURUSD - 8 June 2023

The upcoming European Central Bank (ECB) meeting is expected to involve a rate hike, aligning with market expectations. ECB's Schnabel mentioned that the decision on further rate increases will depend on data, while ECB's Knot expressed skepticism about the adequacy of the current level of tightening. This meeting, which also includes the release of new forecasts, is significant in shaping expectations leading up to July.

Regarding economic data, Germany reported a 0.3% month-on-month increase in industrial production for April on Wednesday, which fell below the anticipated 0.6% growth. On Thursday, a fresh estimate of the Euro area's GDP for the first quarter will be published, along with employment change data.

 

Following the Bank of Canada's rate hike, the US dollar gained momentum on Wednesday, supported by a surge in US bond yields. The 10-year yield climbed by 3.50% to reach 3.79%, marking the highest level since May 29, while the 2-year yield rose to 4.60%. The consensus for the upcoming week still suggests that the Federal Reserve will maintain the Fed Fund rate within the range of 5.00% to 5.25%.

From a technical standpoint, the EUR/USD has formed a symmetrical triangle pattern, suggesting a potential continuation of the downward trend. An important resistance level to watch for is approximately 1.0750, where the 100-day moving average and the downward parallel of the bearish channel intersect. On the other hand, there are support levels around 1.0640, followed by 1.0600.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0900	1.0850	1.0750	1.0700	1.0640	1.0600