EURUSD MONETRARY POLICY CHANGEHello Traders! Looking forward to bring you some juicy EURUSD analysis. ECB will be hiking rates for euro, so the currency will most probably start to strengthen in the next half year.
As of right now euro is hitting multi year lows since 2017 and 2015 because of difficult times regarding world economies after covid and the Ukraine war. We are in a major support area and while the high time-frame charts are still in downtrend, the lower time-frames suggest a reversal and a potential counter-trend.
ECB declared that there will be rate hikes in July and further in September in order to limit consumer spending and curb inflation rate. Rate hikes means that currencies will appreciate because of lower money supply in the market and this will most likely raise the currencies value.
In the chart below we can see the macro picture. I wanted the smaller time-frame trade to be the main publishing idea, because the short to mid term situation might change, longer time-frames take more time to develop.
Now on to current technicals. EURUSD entered a counter-trend after hitting the multi year lows seen on the chart above. We can expect some price stabilizing in this area as further fundamentals develop. As of right now the price is trending downwards short-term after peaking at 1.079. This downtrend is expected to last until our MONTHLY local support area generated by the last closing price, this price level is at 1.051. I expect the short-term downtrend to reverse in this area because of local MONTHLY support and a fibo confluence area around 50-61.8% and to continue our enstablished counter-trend, up until 1.094. This peak level is the 50% of a major downtrend occurring in higher time-frames. After we hit peak levels, the price might go on further to the 61.8% fibo level where profit taking will take course. After that it depends on the further price structure the market will provide us.
