As the market tries to digest hawkish FED and ECB meetings, EURUSD is attempting to stage a comeback to the white uptrend. There were two key points from the meetings this week. The first one is that FOMC members have anticipated 2 more hikes due to better GDP, lower unemployment, and higher core inflation forecasts. During the press conference, Powell maintained a rather neutral stance, which has given EURUSD an opportunity to rally for now.
The second point is that the ECB is not done yet, and following the almost certain July hike, there could be more rate hikes in the pipeline for the eurozone. In contrast to Powell, Lagarde, during the ECB press conference, was more open and hawkish, not shying away from mentioning the July hike, which favored the Euro bulls.
Currently, EURUSD is testing the former support from the April-May period at 1.0960. This resistance could temporarily halt EURUSD, but the momentum appears to be shifting towards the north as relative momentum index suggests.
EURUSD positions are nearing their highest accumulation since the Covid-19 shock, which could be troublesome for EURUSD in the medium term. Whenever the positions have formed a double top-like pattern, EURUSD has faced sharp falls. However, while the top is building, EURUSD sometimes enjoys more upward moves before falling. The downtrend line from the 2008 top is close to 1.16. If EURUSD pushes toward this trend in the coming months, a new significant short opportunity might present itself. But for the moment, 1.0960 and the upper line of the green trend channel at 1.1140 could be the key resistances to monitor.
