The EUR/USD pair has reached the first declining wave target at 1.0950, and analysts anticipate the formation of a corrective wave; however, some think that the euro might collapse. Currently, the pair is consolidating around 1.0985, with a potential link to 1.1025 expected. Following this, a decline to 1.0985 (with a test from above) is possible, followed by an increase to 1.1080. Analysts further suggest that this corrective wave could continue to 1.1124. In today’s article, we will explore the EUR/USD pair movements and whether you should buy euros or dollars for buy back opportunities.
Euro’s Long-Term Potential: Commerzbank Economists Analyze EUR/USD Outlook
EUR/USD is trading below the key level of 1.10, prompting Commerzbank economists to analyze the pair’s future outlook. US data indicates that the Federal Reserve (Fed) may maintain peak interest rates for an extended period, potentially influencing the EUR/USD pair. The European Central Bank’s (ECB) cautious approach has not provided explicit forward guidance on future moves, creating downward pressure on the EUR. As the market remains uncertain, economists weigh in on potential scenarios for the euro’s appreciation over the coming months.
USD Strength Pressures EUR/USD Pair, But Support Remains Crucial
The EUR/USD pair is experiencing consolidation following a significant overnight decline. Trading just below the psychological level of 1.1000 during the Asian session, the pair faces upward pressure from USD strength, while the European Central Bank’s (ECB) cautious approach hinders bullish bets. A break below the 50% Fibonacci retracement level could lead to further losses, potentially challenging the 100-day Simple Moving Average (SMA). On the upside, resistance levels at 1.1000, 1.1030, and 1.1125 hold the key to potential short-covering rallies.
ECB Interest Rate Hike in Focus: EUR/USD Aims for 1.1250 Level
The focus shifts to the European Central Bank (ECB) as they consider an interest rate hike. EUR/USD experiences a continuation of the overall uptrend, setting its sights on the 1.1250 level. While the 50-day EMA provides crucial support around 1.10, a break below may trigger a test of the 1.09 level. Market sentiment remains optimistic, and a dip could offer buying opportunities based on value. Analysts highlight the importance of interest-rate differentials and bond markets in determining currency attractiveness.
EUR/USD Faces Crucial Hurdle at 1.15 Level
As the EUR/USD pair surges, market participants watch the critical 1.15 level for further potential gains. The pair’s momentum remains on the side of the Euro, with the market actively pushing against the US dollar; hence euro should not collapse. Overcoming the 1.1250 level is essential for further upward movement, and analysts expect the pair to approach the challenging 1.15 level with historical significance. Interest-rate differentials and bond markets play pivotal roles in shaping the EUR/USD pair’s direction in the short and long term. Market volatility may impact future movements, urging investors to stay vigilant and informed.
