EUR/USD Direction Unclear ECB Rate Hike Pace Divides Investors

The Euro currency is experiencing a lack of clear direction as investors hold conflicting opinions regarding the European Central Bank's (ECB) potential rate hike pace during its May monetary policy meeting. Some investors remain unconvinced that ECB President, Christine Lagarde, will reduce the pace of policy-tightening to 25 basis points (bps) during a time of critical Eurozone inflation.
From a technical standpoint, the currency has undergone a second retest of the 50% Fibonacci level after experiencing a pullback to the 61.8% level. This pattern commonly reflects an AB=CD formation, leading to the creation of a new swing high. Today's market developments will be crucial in determining the Euro's direction, and our forecast predicts a long setup.