Euro traders are preparing for more moves in the single currency in the sessions ahead as the European Central Bank updates the market on its latest rate decision. The market is fully expecting for the central bank to keep rates on hold and will be looking at the statement and press conference clear direction in the way ahead for rates. The ECB has been very clear in recent months that it is going to be heavily data dependant moving forward and most traders consider that given recent data updates including a tight labour market and persistent wage inflation that the next move will come in consequent meetings, but not today.
The Euro is currently sitting at multi-month highs, but this has had more to do with the dollar’s weakness than the Euro’s strength, but traders are still expecting to volatility after the rate call. Short term resistance on the Hourly charts is now sitting just above current levels near 1.0970 and a more hawkish than expected ECB could push the pair through these levels and then look to challenge the late December high at 1.1137, especially given that this would lead to a continuation of the recent trend. Conversely, more dovish rhetoric would lead to pull backs in the pair, with support sitting around 1.0867 on the 200-day moving average.
Resistance 2: 1.1137 – December 2023 High
Resistance 1: 1.0970 – Short-Term Trendline Resistance
Support 1: 1.0867 – 200-Day Moving Average
Support 2: 1.0665 – Short-Term Trendline Support and June Low
