For the first time since the existence of the single European currency, we witnessed an increase in the interest rate by the ECB by 0.75 basis points. Central bankers said too high inflation is why the key rate is currently at 1.25%. Christine Lagarde’s statement that rate hikes will continue fueled the bulls and they were able to breach the parity level and attempt to start a rally towards the key resistance at 1.0046. If the bulls’ strength continues, then we could see an attempt to breach the next resistance at 1.0088. If even the aggressive bullish news fails to help the bulls and the bears still gain the upper hand, then we could instead see an attempt at breaching the support at the level of parity – 1.0000. On Friday, there is no news that would have a strong effect on the currency pair.
Today’s trading session got off to a relatively calm start. Over the past few days, we have seen movements between the levels of 143.05 and 144.94, and it is likely that the trend is going to continue given the monetary policy divergence between the Federal Reserve and the Bank of Japan. If the bears manage to breach the “green trend”, we could witness an attempt to breach the key support at 140.65 next. No important macroeconomic news is expected today.
Today, we were shaken by the news of the death of the Queen of Great Britain. The sad news came towards the end of Sterling’s trading session. All in all, it did not have a negative impact on the pound’s value against the U.S. dollar at the moment. In fact, the trading session started with the confirmation of the resistance breach at 1.1500. The next resistance for the bulls is found at 1.1600. If the pound starts to lose its ground against the greenback again, then we could see an attempt to reach the support at 1.1441.
The German index started the trading session with an advantage for the bulls. At the time of writing, the buyers will try to keep the index above the level at 12930, and if they do, the EUGERMANY40 might end the week in the green. However, the more likely scenario is for a corrective move towards the mentioned level which, if breached, could head the sell-off towards a test of the support at 12718.
The bulls are currently testing the resistance at 31950, and if they manage to tip the scales in their favour, we could witness an attempt to break this resistance. In the event that the bulls fail to remain in control of the US30 and lead it above 31950, the index might end the week lower, at around the support of 31315. There is no news today that would have a strong effect on the instrument.