EUR/USD is slowly rising on Monday but the overall situation in the major currency pair hasn’t changed – the “greenback” remains among the market players’ favourites.
The USD owes it to the Fed’s June meeting results, where the regulator hinted at two possible rate hikes before the end of 2023. It’s earlier than expected, that’s why this news provided the American currency with great support.
In addition to that, St. Louis Federal Reserve Bank President James Bullard told last Friday that the changes in the regulator’s rhetoric were a natural response to the current economic growth and inflation boost. In his opinion, the country has been recovering after the coronavirus pandemic, that’s why everything that is happening to it is quite normal.
Experts immediately compared this situation with 2013, when the Fed announced a decline in the QE program.
In the H4 chart, after finishing the descending wave at 1.1947 and then forming a new consolidation range around this level, EUR/USD has broken it to the downside to complete another descending structure at 1.1855. Possibly, today the pair may test 1.1947 from below and then resume trading downwards with the short-term target at 1.1700. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is leaving the histogram area and expected to grow towards 50. After rebounding from this level, the line may fall and get back to the current lows.
As we can see in the H1 chart, after rebounding from 1.1947, EUR/USD has completed the descending structure towards 1.1855. Today, the pair may correct to test 1.1947 from below and then resume trading downwards with the short-term target at 1.1760. From the technical point of view, this scenario is confirmed by the Stochastic Oscillator: after breaking 50 to the upside, its signal line may continue growing towards 80
