Bullish view
Buy the EUR/USD pair and set a take-profit at 1.1340.
Add a stop-loss at 1.1150.
Timeline: 1-2 days.
Bearish view
Sell the EUR/USD pair and set a take-profit at 1.1150.
Add a stop-loss at 1.1340.
EUR/USD pair held steady as market participants remained concerned about France and Italy, where protests have continued to rise. It rose to 1.1237, a few points above this month’s low of 1.1112.
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Concerns About European Debt Crisis Continue
EUR/USD pair rose, even as the crisis in Europe continued. France has declared a curfew in key cities as protests turned deadly. The students are protesting after the government slashed spending on education and other areas. These cuts have happened as the Emmanuel Macron administration confronts the soaring public debt, with the debt-to-GDP ratio being at 120%.
There are signs that protests are spreading to other countries. Italy has now deployed 500 soldiers to Milan, where protests on the cost of living have continued. Like France, Italy has a debt-to-GDP ratio of 140%, one of the highest in the region. These concerns have led to fears of another debt crisis in the region.
The next important catalyst for the pair is the upcoming statements by Philip Lane and Christine Lagarde. Lane is the ECB’s Chief economist, while Lagarde is the head of the central bank. These officials will provide more hints on what to expect from the bank. Polymarket traders expect the bank to leave interest rates in the upcoming meeting.
The EUR/USD pair will react to the performance of the energy market, with Brent and the West Texas Intermediate trading at $109 and $98, respectively. Gasoline and diesel prices have jumped to $4.27 and $6.32. Higher prices mean that the US inflation will remain above 2% in the foreseeable future.
EUR/USD Technical Analysis
The four-hour chart shows that the EUR/USD pair has held steady in the past few days, moving from a low of 1.1112 last week to the current 1.1237. It has moved to the 23.6% Fibonacci Retracement level.
The pair has also jumped above the 50-period Exponential Moving Average (EMA). At the same time, the MACD indicator has continued rising and is above the neutral level.
It has also formed a small inverted head-and-shoulders pattern, a common bullish sign in technical analysis. Therefore, the pair will likely continue rising as bulls target the key resistance level of 1.1340, the 38.2% retracement level.
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