Daily Analysis EURUSD - 16 June 2023

On Thursday, the EUR/USD experienced a significant surge, reaching its highest level in a month at 1.0952. The pair is maintaining its gains, indicating that the rally may not be over yet. This strong performance can be attributed to the European Central Bank's (ECB) hawkish stance and the overall weakness of the US Dollar.

As anticipated, the ECB raised its interest rates by 25 basis points while keeping the forward guidance unchanged. ECB President Lagarde emphasized that there is still work to be done and expressed that another rate hike in July is the most likely scenario. Inflation forecasts were revised upwards, and the market has already priced in a 25 basis point increase at the next meeting.

The rise in German bond yields coupled with a decline in Treasury yields has contributed to the strengthening of the EUR/USD. Despite Federal Reserve Chair Powell's hawkish tone on Wednesday, it did not have a lasting impact on the US Dollar.

While inflation data from the eurozone is scheduled for release on Friday, it is not expected to have a significant impact as these figures are final estimates. On the other hand, market participants will be focusing on the University of Michigan Consumer Sentiment Index from the US. The recent central bank meetings will continue to be analyzed and digested by market participants.

In terms of technical analysis, the EUR/USD pair made a bullish movement we didn’t see for more than 4 months and found resistance at the 1.0960 level. A possible correction can happen and the level to watch is 1.0912 but the CPI data today may surprise. In case of a breakout to the upper side, the 1.1000 is a good level to watch followed by the 1.1050.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1050	1.1000	1.0950	1.0912	1.0860	1.0800