The European Central Bank (ECB) raised its interest rates by 0.5% to 3%, as planned, to combat inflation, despite some investors’ calls to delay the hike due to banking sector turmoil. The ECB is expecting inflation to exceed its 2% target through 2025. The Euro gained poitively against the Dollar and Pounds, and Swiss Francs as a result of the fundamental data, the technical outlook, however, would determine what our reaction to this situation would be.
EURUSD
EURUSD has made an initial reaction to the drop-base-rally demand zone. At this juncture, we also see how the demand zone aligns perfectly with the 100-Day Moving Average, the trendline support, and the 88% Fibonacci retracment area. The sentiment is clearly, largely bullish.
Analysts’ Expectations:
- Direction: Bullish
- Target: 1.08700
- Invalidation: 1.04850
EURGBP
Similar to what we had on EURUSD, we see here how EURGBP also made an initil reaction away from the demand zone. In the case of EURGBP, however, we see the MAs arrayed in a bullish pattern. Based on the confluence of the trendline support, the 200-Day moving average, the MA array, the 88% of the Fibonacci retracement tool, and finally, the demand zone, I will keep my sentiments bullish on EURGBP.
Analysts’ Expectations:
- Direction: Bullish
- Target: 0.90560
- Invalidation: 0.86930
EURJPY
EURJPY recently broke out of a wedge pattern, after which price has made a retracement into the demand zone responsible for that break of structure. It is important to note that as a result of the fact that the demand zone aligns perfectly with the 76% Fibonacci level, as well as the deop-base-rally demand zone, it is only logical to conclude in favour of a bullish outcome.
Analysts’ Expectations:
- Direction: Bullish
- Target: 147.30
- Invalidation: 137.30
EURNZD
EURNZD is my favourite setup as far as this piece goes, for very obvious reasons. The daily timeframe shows price currently trading within a channel, with the current price action heading towards the trendline support of the channel. The interesting aspect of this setup, however, is the fact that the trendline support has other confluences from the drop-base-rally demand zone, the MA array, the 100-Day MA, and a secondary trendline support.
Analysts’ Expectations:
- Direction: Bullish
- Target: 1.72940
- Invalidation: 1.68090
CONCLUSION
The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.
