EURUSD maintains price growth in consolidation. Monday saw the EUR/USD currency pair experience a roller coaster of emotions as it alternately gained and lost ground. The currency pair attempted to extend the bounce off the February lows near the 1.0600 psychological level, which was recorded last week.
It appears that caution has taken over the markets ahead of the FOMC Minutes and the Fed’s preferred inflation gauge. This will be released on Wednesday and Friday, respectively. The recent pullback in spot rates was also influenced by hawkish remarks from the Fed’s policymakers. However, some doubts regarding the rate path emerged from the ECB’s rate-setters after the March gathering. We are hopeful that the advanced Consumer Confidence in the eurozone, tracked by the European Commission (EC), will give us a better insight into the current state of the markets. This publication will be of great interest, as there are no US data releases in sight.
EURUSD Potential Outlook
The potential next steps from the ECB are also likely to have a considerable effect on the euro, particularly after the bank has already predicted another 50 bps rate increase at the March event. This is further proof that the ECB is devoted to sustaining the euro and helping it to remain strong. The fact that recession worries in the euro area have now diminished is also a very encouraging sign for the currency. This is a critical factor in preserving the ongoing recovery in the single currency and the hawkish narrative from the ECB. All in all, the outlook for the euro looks promising, and it is pleasing to see the currency continuing to gain strength. Overall, the EUR/USD currency pair appears to be cautiously optimistic as it continues to hover just above the 1.0700 level. Investors will be keeping a close eye on the upcoming economic data to see how the pair will react.
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