EURUSD was sharply up in European / early US session on Tuesday, reversing the large part of last Thu/Fri pullback and shifting near-term focus to the upside on signals that correction from new multi-week high (1.1012) is likely over.
The single currency received strong boost from ECB President’s hawkish comments today, as Mrs. Lagarde and majority of policymakers promoted higher interest rates for longer period, signaling new era of tight policy.
Lagarde said that inflation, initially thought to be transitory, became entrenched into the broader economy and will likely remain elevated for a longer period, with story of inflation peak being abandoned for now.
Although we did not hear something substantially new from the ECB, the news impacted market strongly, making the Euro more attractive to investors.
Improved picture on daily chart, as positive momentum continues to strengthen and MA’s returned to full bullish configuration, contribute to bullish outlook.
Fresh bears eye key barriers at 1.10 (psychological) and 1.1012 (June 22 peak) with firm break here to generate signal of bullish continuation and expose 2023 peak at 1.1095 (Apr 26).
Rising 10DMA (1.0925) offers solid support, followed by pivotal supports at 1.0900 zone (daily cloud top / Tenkan-sen).
Res: 1.0976; 1.1000; 1.1012; 1.1053.
Sup: 1.0940; 1.0925; 1.0905; 1.0883.