EURUSD Double Bottom on Watch

Price action in EURUSD is starting to look interesting here. The pair has been moving steadily lower within a clearly defined bear channel from the 2021 highs. However, recently we’ve seen the pair finding big support at the 1.0364 level, which has paused the decline for now. We’re seeing big bullish divergence on momentum studies around current levels, potentially setting up a large double-bottom trade. With this In mind, trades should keep an eye on the 1.0775 level, looking for a break of that level to target 1.0951 and 1.1190 thereafter.

Keep An Eye On

Commentary from ECB’s Lagarde this week will be closely watched. The ECB is gearing up for its first rate hike in over a decade in July and markets are highly sensitive to any further cluse as to how the bank is likely to act in coming months. Currently, projections are for a .25% hike in July with a larger hike likely to follow in September. Opening comments from Lagarde today have highlighted upside risks into these meetings. If the bank is seen to have become more hawkish, or becomes more hawkish, EUR is likely to rally hard against USD near-term as the monetary policy divergence between the Fed and ECB erodes further. So, important to monitor further comments from Lagarde over the event.