- The EUR/USD pair could extend its leg higher after making a new higher high.
- A temporary drop was natural.
- Escaping from the current range could bring new opportunities.
The EUR/USD price rallied in the short term as the US dollar lost ground. The pair is trading around 1.0096 at the time of writing.
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Yesterday, the ECB monetary policy meeting was decisive. As you already know, the Main Refinancing Rate was increased from 0.50% to 1.25%, as expected. The European Central Bank will continue hiking rates in the next monetary policy meetings.
On the other hand, the US Unemployment Claims came in better than expected in the last week, but the indicator failed to save the USD from the downside. Today, ECB President Lagarde’s remarks impacted the currency pair.
Later, the Canadian Unemployment Rate and the Employment Change could bring an action on the USD. The US Final Wholesale Inventories indicator could report a 0.8% growth. The price could also react after the FOMC Member George and FOMC Member Waller’s speeches.
EUR/USD price technical analysis: Bullish behavior
The EUR/USD pair registered an impressive rally after retesting the broken descending trendline. Technically, it has found strong support on the 0.9877 and the weekly S1 (0.9880). The pair has passed above the 1.0090 and through the 1.0096 upside obstacles.
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However, the pair has failed to stay there, signaling exhausted buyers. The price could come back down in the short term to test the near-term downside obstacles before resuming its growth. A temporary drop could help the buyers to catch a new leg higher. The price could try to accumulate more bullish energy and attract more buyers. After its strong growth, a temporary sell-off is natural.
As you can see on the hourly chart, the price is trapped between 0.9899 and 1.0096 levels. It has registered only false breakouts from this extended range. Escaping from this formation could bring new opportunities and confirm a clear direction. A new higher high activates a larger swing higher.
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