The current high growth rate, which was last seen in November 2022, was the result of decisions by central banks:
→ on Wednesday, the US Federal Reserve kept the interest rate at 5.25%;
→ and on Thursday, the ECB raised the rate from 3.75% to 4%. Eurozone inflation will remain “too high for too long,” Lagarde said. The possibility of a rate hike in July is “very likely”.
If the Fed started to apply the tightening policy earlier and came to a pause in a series of rate hikes faster, in turn the ECB is taking similar actions, but with some lag in time.
On Friday morning, the EUR/USD rate reached 1.096. The EUR/USD chart shows that:
→ price dynamics continues to develop an upward channel (shown in blue);
→ the EUR/USD rate is approaching the psychological mark of 1.1. If in February the bulls suffered a quick setback (A), and in April-May they managed to linger (B) around this mark, then the continuation of the current momentum can lead to a successful bullish breakout and fixing the rate above 1.1.
