Ahead of the ECB meeting, EURUSD is facing bullish pressures. The downtrend channel which started in February is being tested to the upside as ECB is about the end the Asset Purchase Program. Also, the first-quarter GDP revised to %0.6 from %0.3, which gives ECB a little extra room to hike rates this year.
The market’s pricing 25 basis points hike in July and almost 200 basis points increase for the next one year period. ECB’s and Lagarde’s remarks will carry even more weight for the future of EURUSD in tomorrow’s meeting. A hawkish shift is expected. If that happens, EURUSD might break the trend channel and start to rise to the post-pandemic trend line which is near 1.11 at the moment. The 100-day moving average can also be followed as a possible resistance ahead.
If ECB remains extra dovish about the hike plan, up moves can create short-selling opportunities as long as the downtrend channel holds.
