Daily Analysis EURUSD - 22 June 2023

Federal Reserve Chairman Jerome Powell confirmed that more interest rate increases are likely due to persistently high inflation. However, he acknowledged that bringing inflation down to the target of 2% will take time. Despite signs of a loosening labor market, there is still a shortage of available labor compared to job openings. The Federal Open Market Committee (FOMC) expects two additional interest rate hikes by the end of the year. Inflation, particularly core inflation, remains well above the target despite some moderation. The Fed decided to hold off on rate hikes in a recent meeting to assess the impact of previous tightening measures and suggested a more moderate pace for future increases.

In a different context, the German IFO Institute warned of a sharper-than-expected recession in Germany. European Central Bank (ECB) member Kazimir expressed uncertainty about the ECB's continuation of rate hikes in September. However, ECB members Schnabel and Nagel maintained a hawkish stance, emphasizing that there is still work to be done. Market expectations support further rate hikes from the ECB, which has been favorable for the euro.

The price action of the EURUSD continued higher at the 1.1000 level as market pricing a more ECB hikes in the next meetings but still not sure about the Fed ones. The next resistance level to watch would be 1.1050.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1080	1.1050	1.1000	1.0950	1.0912	1.0860