While the U.S. inflation has surged to 3.7%, the anticipated strengthening of the dollar has not occurred. This inflationary uptick, outpacing projections, seemingly prompts the Federal Reserve to hike rates further.
Apparently, the dollar's overbought position hampers its growth. There is a need for at least a minor correction, and today's ECB board meeting outcomes might be the catalyst.
Despite ongoing recessionary threats to the eurozone economy, the European regulator has opted to increase the refinancing rate from 4.25% to 4.50%. This gives the market a reason to ease some tension arising from the dollar overbought state.
As the market held its breath awaiting the ECB rate decision, the EUR/USD currency pair seemed to be retreating from a pivotal trading juncture around the level of 1.0680. This shift did not lead to any profound changes and eventually transitioned into sideways trading.
Confined within a tight range between 1.0700 and 1.0770, this cycle of oscillation could signify a build-up of trading momentum, the climax of which might fuel market speculation. Should the price breach or sustain beyond these boundaries, it might unleash a directional move. In a bullish trajectory, this momentum could at least target the 1.0800 level, bolstering long positions. Conversely, in a bearish outlook, a revisiting of the recent low might be on the cards.
Amidst speculative price swings, the pound-dollar pair momentarily revisited the recent low of its downward cycle. However, it failed to sustain below the 1.2450 threshold, subsequently reverting to its familiar trading range of 1.2450/1.2550.
In the present landscape, traders are focusing on the trading range between 1.2450 and 1.2550. Any sustainable move beyond these levels could indicate the conclusion of this sideways phase. Such a development might serve as a technical clue hinting at the directional trend of the pair.
https://www.instaforex.com

FX Analytics - https://www.instaforex.com/forex_analytics
Forex Calendar - https://www.instaforex.com/forex_calendar
Forex TV from InstaForex - https://www.instaforex.com/instaforex_tv

Forex charts - https://www.instaforex.com/charts
Instant account opening - https://www.instaforex.com/fast_open_live_account
Forex Trading Contests - https://www.instaforex.com/forex_contests

List of official InstaForex blogs:
https://www.facebook.com/instaforex
https://www.instagram.com/instaforex/
https://twitter.com/InstaForex

#forex_news #european_session #instaforex_tv

00:00 INTRO
00:20 The dollar
00:33 ECB INTEREST RATE
00:54 EUR/USD
01:59 GBP/USD