EURUSD Forecast: ECB Financial Review Meets April Highs

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By :  ,  Market Analyst
  • EURUSD Forecast: the pair is back up to April highs; are March highs next in sight?
  • U.S inflation metrics edged lower, supporting bullish sentiment on the euro
  • ECB Financial stability review leans toward an improved economic outlook, yet global policy uncertainty adds fragility

Comparing the November 2023 ECB Financial Review with that of 2024, an improvement in economic data is present. With a noticeable trend out of recession risks and with inflation figures aligning towards the 2% target, the revision reflected higher possibilities for a soft landing. However, given the persistence of geo-political risks, rising debt service costs, and global rate policy uncertainties, the outlook remains fragile.

Yesterday’s lower-than-expected U.S CPI results added bullish sentiment on the EURUSD chart, supporting its trend back up towards April highs. The daily high lost momentum below the 1.09 level, raising questions about the next rally towards March highs near the 1.0950 level.

The upcoming FOMC member speeches will be watched for any surprising claims

EURUSD Forecast – EURUSD – Daily Time Frame – Logarithmic Scale

EURUSD Forecast _2024-05-16_17-52-16 

The EURUSD is currently hovering near 1.0850, after recording a daily high slightly below 1.09. The fragile ECB outlook did not generate much bullish sentiment, possibly shifting the sentiment of the trend. The relative strength index is up at overbought zones, and a break above 1.09 is needed to confirm the next encounter towards the 1.0950 level, and a stronger bull run can reach a resistance level near 1.1020. On the downside, the week’s previous 1.0820 – 1.08 resistance could support any declines, followed by further support levels near 1.0780 and 1.0730, respectively.

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