The eurusd hit a 5-month high against the dollar early in the new week, despite easing sentiment amid protests in China. However, buyers have struggled to break through the main resistance area around 1.0500 and we may see a slight pullback in this area for now.
The main support levels to watch recently are around the 1.0400 and 1.0317 levels, marked by the 23.6% Fibonacci retracement level of the previous bullish wave. On the other hand, if the bulls manage to maintain the recent momentum, the uptrend could accelerate towards the next resistance at 1.0600.
European Central Bank President Lagarde and Cleveland Fed President Loretta Mester made hawkish comments in the afternoon, but their comments did not cause major market movement. Here are some things to keep in mind :
Lagarde, ECB:
"I wouldn't say inflation has peaked. Rates are still in the loose range, there is still a long way to go, the European Central Bank has promised to bring inflation back to target in the medium term. Interest rates may need to be raised to tighter levels. As risks to the inflation outlook increase, inflation will eventually slow. I would not say that inflation has peaked. It may be necessary to move rates into restrictive territory. The ECB will raise rates as high as possible to get the desired results.
Mester, Fed:
Does not believe the Fed is close to a pause on tightening. The costs of stopping tightening too soon are high. Fed members need to see more good inflation indicators.
The main support levels to watch recently are around the 1.0400 and 1.0317 levels, marked by the 23.6% Fibonacci retracement level of the previous bullish wave. On the other hand, if the bulls manage to maintain the recent momentum, the uptrend could accelerate towards the next resistance at 1.0600.
European Central Bank President Lagarde and Cleveland Fed President Loretta Mester made hawkish comments in the afternoon, but their comments did not cause major market movement. Here are some things to keep in mind :
Lagarde, ECB:
"I wouldn't say inflation has peaked. Rates are still in the loose range, there is still a long way to go, the European Central Bank has promised to bring inflation back to target in the medium term. Interest rates may need to be raised to tighter levels. As risks to the inflation outlook increase, inflation will eventually slow. I would not say that inflation has peaked. It may be necessary to move rates into restrictive territory. The ECB will raise rates as high as possible to get the desired results.
Mester, Fed:
Does not believe the Fed is close to a pause on tightening. The costs of stopping tightening too soon are high. Fed members need to see more good inflation indicators.
