The euro continued its rise and topped $1.09, reaching its highest level since May 10. This was facilitated by the decision of the European Central Bank (ECB) to raise interest rates for the eighth time in a row and signal future rate hikes. ECB President Christine Lagarde expressed high confidence that rates will be raised in July, stressing that the central bank does not intend to suspend its activities, in contrast to the more cautious position of the US Federal Reserve.
In addition to raising interest rates, the ECB also raised its inflation forecasts, but slightly lowered its economic growth forecasts. Core inflation, which excludes energy and food prices, is projected to peak at 5.1% in 2023 and then gradually decline to 3.0% in 2024. It is the decision of the ECB and its positive forecasts that support the euro and contribute to its strengthening against the dollar.
The Euro/Dollar currency pair EUR/USD completes the trading week near the area of 1.0945 and continues to move as part of strong growth and the formation of the Head and Shoulders reversal pattern. Moving averages indicate a bullish trend. Prices have broken through the area between the signal lines up, which indicates pressure from buyers of the European currency and a likely continuation of growth already from current levels. At the moment, we should expect an attempt to develop the growth of quotes and test the resistance area near the level of 1.0995. Where is the expected rebound down and the continuation of the fall of the Euro Dollar. The potential target of the decline is the area below the level of 1.0085.
EUR/USD Weekly Forecast June 19 — 23, 2023
An additional signal in favor of a decrease in the EUR/USD currency pair on Forex will be a test of the resistance line on the relative strength index (RSI). The second signal will be a rebound from the lower border of the bullish channel, which was broken down by the sellers. Cancellation of the option of falling quotes of the Euro/Dollar pair in the current trading week June 19 — 23, 2023 will be a strong growth and a breakdown of the level of 1.1265. This will indicate a breakdown of the resistance area and continued growth of the pair to the area above the level of 1.1675. With a breakdown of the support area and closing of quotes below the level of 1.0655, which will indicate a breakdown of the lower boundary of the “Head and Shoulders” reversal pattern and the beginning of the pattern with targets below.
Among the important news from America and Europe in the next trading week that may have an impact on the EUR/USD rate, it is worth highlighting: United States Building Permits, Federal Reserve System) (Fed) Chair Powell Testimony, United States Existing Home Sales, EIA United States Crude Oil Stocks Change.
EUR/USD Weekly Forecast June 19 — 23, 2023 suggests an attempt to develop a bullish correction and test the resistance area near the level of 1.0995. Where should we expect the price to bounce down and the pair continue to fall in the Forex market to the area below the level of 1.0085. An additional signal in favor of the decline will be a test of the resistance line on the relative strength index (RSI). Cancellation of the option of falling Euro Dollar will be a strong growth and a breakdown of the level of 1.1265. In this case, we should expect the pair to continue to rise with a potential target at the level of 1.1675.
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