EURUSD High Low Levels Channel Breakout
EUR/USD Weekly Forecast: A test of 1.1000 remains on the cards in key central bank week
Hawkish comments from ECB officials allowed EUR/USD to gain traction and touch its highest level in nine months near 1.0930. ECB policymakers Klaas Knot and Peter Kazimir both said that they were in favour of two more 50 basis points (bps) rate hikes in February and March. On the same note, "We have made it clear that ECB interest rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive and stay at those levels for as long as necessary," ECB President Christine Lagarde reiterated while speaking at a conference in Germany on Monday.
On Tuesday, the data from the Eurozone showed that the business activity in the Eurozone expanded modestly in early January, with S&P Global Composite PMI edging higher to 50.2 from 49.3 in December. Later in the day, S&P Global reported that Composite PMI in the US edged higher in the same period but remained well below 50, coming in at 46.6. Commenting on the data, "the rate of input cost inflation has accelerated into the new year, linked in part to upward wage pressures, which could encourage a further aggressive tightening of Fed policy despite rising recession risks," noted Chris Williamson, Chief Business Economist at S&P Global Market Intelligence. This comment helped the US Dollar limit its losses and capped EUR/USD's upside.
Hawkish comments from ECB officials allowed EUR/USD to gain traction and touch its highest level in nine months near 1.0930. ECB policymakers Klaas Knot and Peter Kazimir both said that they were in favour of two more 50 basis points (bps) rate hikes in February and March. On the same note, "We have made it clear that ECB interest rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive and stay at those levels for as long as necessary," ECB President Christine Lagarde reiterated while speaking at a conference in Germany on Monday.
On Tuesday, the data from the Eurozone showed that the business activity in the Eurozone expanded modestly in early January, with S&P Global Composite PMI edging higher to 50.2 from 49.3 in December. Later in the day, S&P Global reported that Composite PMI in the US edged higher in the same period but remained well below 50, coming in at 46.6. Commenting on the data, "the rate of input cost inflation has accelerated into the new year, linked in part to upward wage pressures, which could encourage a further aggressive tightening of Fed policy despite rising recession risks," noted Chris Williamson, Chief Business Economist at S&P Global Market Intelligence. This comment helped the US Dollar limit its losses and capped EUR/USD's upside.
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