Euro Exchange Rate: Weekly Forecast 18th June – 24th June

The EUR/USD pair closed the week near the 1.09410 level after reaching a high of 1.09725 on Friday, marking its most vital value since May 11th. This robust performance came from solid gains throughout the week and positive outlooks from the European Central Bank (ECB) and the Federal Reserve, instilling greater confidence in financial institutions. Notably, the Euro exchange rate had previously experienced a similar value in early May as it began to decline.

Bullish sentiments prevailed as the EUR/USD climbed from a low of approximately 1.07300 on Monday, demonstrating a bullish outcome for the week. The upward movement gained momentum, especially after the ECB’s hawkish tone and interest rate hike announcement on Thursday, compared to the US Federal Reserve’s cautious stance expressed on Wednesday.

Traders Eye Mid-Term Resistance Levels as EUR/USD Continues to Rise

The rapid ascent of the EUR/USD has delighted bullish speculators anticipating a resurgence in upward momentum. With the pair previously trading near 1.10920 in late April and early May, some traders now have their sights set on those levels as potential targets. However, traders should be cautious, especially day traders with limited resources, as uncertainties surrounding the US Federal Reserve’s future policy decisions could introduce volatility to the USD in the days and weeks ahead.

While the US Federal Reserve’s decision to pause interest rate hikes was widely expected, the question remains whether this halt will become a permanent pause or a temporary break before another hike in July. Investment firms showed considerable optimism toward the EUR/USD last week, but historical data suggests that previous encounters with higher ratios have resulted in choppy market conditions.

Fed Rhetoric and US Banking Holiday Impact EUR/USD Outlook

Due to a US banking holiday, lower trading volumes are expected in the global Forex market, which could affect the EUR swap rates. Traders should pay attention to Federal Reserve President of New York, John Williams, who will speak on Tuesday, potentially causing a temporary reaction among 100 EUR in USD traders. Additionally, Federal Reserve Chairman Jerome Powell’s testimony before Congress on Tuesday and Wednesday will provide further insights into the Fed’s outlook.

The Speculative Price Range Is 1.08300 to 1.10650

The strong gains made by the EUR/USD have instilled confidence in speculators, who believe there is still room for further upside momentum. However, traders must be aware that the previous week’s price velocity may not persist in the coming days. It is crucial to monitor support levels around 1.09200, as short-lived reversals are common in the Forex market. If 1.09000 becomes vulnerable, a test of the 1.08800 range may occur, providing an opportunity for bullish EUR/USD traders to anticipate further upward moves.

Bullish sentiment towards the EUR/USD is likely to remain strong this week, with traders potentially looking at the GBP/USD pair for comparison and perceiving the EUR swap rate as having more growth potential. However, traders should prioritize risk management practices and avoid blindly betting on upward momentum. A strong start for the Euro exchange rate in the upcoming week, maintaining the 1.09300 level, could signal a further upward movement towards 1.10000. Nonetheless, aiming for prices in the 1.09600 to 1.09800 range may be a more conservative short-term approach.

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