EUR/USD Poised for Further Gains Despite Short-Term Technical...
EUR/USD Poised for Further Gains Despite Short-Term Technical Hurdles
The EUR/USD pair experienced a remarkable surge on Wednesday, registering a gain of over 1% and reaching levels unseen since late November, surpassing the 1.1000 mark. While short-term technical indicators hint at a potential downward correction, a comprehensive analysis incorporating the main scenario, the Commitments of Traders (COT) report, and market sentiment suggests a more probable scenario of a new bullish impulse and the continuation of the uptrend. Investors may be cautious about betting against the US Dollar's (USD) potential rebound, particularly in the aftermath of the unexpected dovish stance taken by the Federal Reserve (Fed).
In addition to the market dynamics, the recent decision by the European Central Bank (ECB) to leave key rates unchanged aligns with expectations from the December meeting. Despite revising inflation projections lower, the ECB emphasized its commitment to ensuring policy rates remain at sufficiently restrictive levels for "as long as necessary." This reinforces the overall positive outlook for the EUR/USD pair in the mid to long term.
As the pair navigates potential short-term technical hurdles, the broader context, including the dovish Fed surprise and the ECB's strategic approach, positions the EUR/USD for continued strength. Traders and investors are advised to consider the broader market factors influencing the pair and anticipate further upside potential in the coming sessions.
Our preference
Long positions above 1.0900 with targets at 1.1030 & 1.1065 in extension.
The EUR/USD pair experienced a remarkable surge on Wednesday, registering a gain of over 1% and reaching levels unseen since late November, surpassing the 1.1000 mark. While short-term technical indicators hint at a potential downward correction, a comprehensive analysis incorporating the main scenario, the Commitments of Traders (COT) report, and market sentiment suggests a more probable scenario of a new bullish impulse and the continuation of the uptrend. Investors may be cautious about betting against the US Dollar's (USD) potential rebound, particularly in the aftermath of the unexpected dovish stance taken by the Federal Reserve (Fed).
In addition to the market dynamics, the recent decision by the European Central Bank (ECB) to leave key rates unchanged aligns with expectations from the December meeting. Despite revising inflation projections lower, the ECB emphasized its commitment to ensuring policy rates remain at sufficiently restrictive levels for "as long as necessary." This reinforces the overall positive outlook for the EUR/USD pair in the mid to long term.
As the pair navigates potential short-term technical hurdles, the broader context, including the dovish Fed surprise and the ECB's strategic approach, positions the EUR/USD for continued strength. Traders and investors are advised to consider the broader market factors influencing the pair and anticipate further upside potential in the coming sessions.
Our preference
Long positions above 1.0900 with targets at 1.1030 & 1.1065 in extension.
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