Bullish view
- Buy the EUR/USD pair and set a take-profit at 1.1050.
- Add a stop-loss at 1.0940.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 1.0975 and a take-profit at 1.0900.
- Add a stop-loss at 1.1025.
The EUR/USD price continued rising even as several Fed officials insisted that the bank was not done raising interest rates. The pair jumped to a high of 1.1000, the highest point since June 22nd of this year. It has risen by a few pips from last week’s low of 1.0837.
Hawkish Fed speakers
The EUR/USD pair continued rising as traders came to terms with last Friday’s soft jobs numbers. In a report, the Bureau of Labor Statistics (BLS) showed that the economy added over 209k jobs in June, lower than the median estimate of 230k.
Despite the soft jobs numbers, three Fed speakers who talked on Monday said that more hikes were necessary to cool inflation. In a statement, Mary Daly, the head of San Francisco Fed, said that the bank will need to hike a couple of more hikes.
In a separate statement, Atlanta’s Raphael Bostic, warned that inflation was still too high even though the trajectory is in the right direction. Loretta Mester of Cleveland Fed had the same sentiment, saying:
“I believe a somewhat tighter policy stance will help achieve a better balance between the risks of tightening too much against the risks of tightening too little.”
These statements came two days ahead of the upcoming US consumer inflation data. Economists polled by Reuters expect the data to reveal that US inflation remained above the Fed’s target of 2%.
Precisely, economists see the data to show that the headline CPI dropped to 3.1%, the lowest level in months. Core inflation, which most analysts focus on, is expected to remain above 5.0%.
The only EUR/USD news to watch will be the latest German consumer price index (CPI) and economic sentiment data.
EUR/USD technical analysis
The EUR/USD pair has made a bullish breakout in the past few days. It has moved above the important resistance point at 1.0927, the highest point on June 3rd. The pair has moved above the 25-day and 50-day moving averages. It has also moved to the 78.6% Fibonacci Retracement level.
Notably, the pair is approaching the important resistance point at 1.1010, the highest point on June 22nd. Therefore, more upside will be confirmed if the pair moves above the resistance at 1.1015. If this happens, the pair will likely have a bullish breakout to 1.1050.
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