The euro receives a boost after some hawkish ECB comments

Frankfurt (Feb 23)  After some heavy greenback strength in recent months, the euro looks like it could be bouncing back. At the last ECB meeting, the governing council seemed to admit that the central bank may need to be slightly more hawkish as inflation continues to bite. Many analysts have been noting that the ECB had been behind the curve in comparison to the RBNZ and BoE when it comes to acting against higher prices. The ECB has now taken a slightly more hawkish stance and comments today have been supporting that.

Today ECB's Holzmann said "the ECB could take a first interest rate step in the summer and a second at end-2022. He then added "it is possible for the ECB to hike rates before ending bond purchases" something which they have said they would wait for in the past.

Looking at the hourly chart below, the price has spiked up 0.27% on the session. Overnight the greenback was under pressure against the antipodeans as the RBNZ hiked rates and announced a more hawkish stance. There are two key levels on the EUR/USD chart below. The resistance is now the level in focus. Around 1.13900 is key resistance, the green area highlights the fact that the zone has been tested and rejected six times. On the downside, the red zone at 1.1290 is the consolidation low. If this breaks it could mean that the pair might be looking at another move to the downside. On the higher timeframes, the next big support is 1.1121. This could be the target for the bears if this current consolidation low breaks.

reuters