EUR (EUR) Latest: Hawkish ECB Talk Boosts Euro, EUR/USD Consolidation Test

EUR/USD Forex Price, Chart and Analysis

• Members of the ECB will be doubled in proportion.
• EUR/USD may retake parity in the short term.

A number of ECB policymakers have been doubling down on the central bank’s stance on interest rates and inflation, arguing that higher rates are needed for a longer period to ease double-digit inflation. In what appears to be a concerted effort to reassert the power of the central bank and the stock market, the financial wires are full of talk of a rogue ECB.

• The ECB’s Martins Kazak said recently that there is no need to end rate hikes this year and that any recession is likely to be shallow and short-lived, so the central bank should continue to raise rates into 2023 as it does not require any rate cuts.
• Board member and president of the Deutsche Bundesbank, Joachim Nagel, recently said that a major rate hike is needed and that the ECB should not leave it too soon to normalize.
• ECB Vice President Luis de Guindos said the central bank should continue to raise rates to a level that ensures inflation is back on track.

The ECB raised its rate by 75 basis points to 1.50% at the end of October, its third consecutive hike and the highest level seen since 2009. The central bank is expected to raise rates by another 50 basis points at its December 15 meeting.

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While the euro has rallied on expectations of higher rates, the US dollar is under pressure as traders begin to look ahead to higher US expectations and instead focus on when the Fed can end its tightening cycle. Although this may be months away, the fact that the markets are already looking for a change is on the green background. With this week’s US midterm elections and which party could control one or both of the House and Senate, the US dollar could be volatile in the coming days and weeks.

EUR/USD is currently trading evenly on both sides with momentum looking to push the pair higher. A series of short-term high-low supports since late September are supporting the move and a late October double retest around 1.0093 is the next target. A break of this level will eliminate medium-term series lows and allow the pair to return to 1.0200.

EUR/USD Daily Forex Price Chart November 8, 2022

Chart via TradingView

According to retail traders data, 47.62% of forex traders are net-long and the ratio of traders short to long is 1.10 to 1. The number of traders is 1.90% less than yesterday and 14.01% less than last week and the number is less than a week. Traders’ net-shorts are up 18.04% from yesterday and up 25.67% from last week.

We usually take a contrarian view on public sentiment, and the fact that traders are net-short suggests that the EUR/USD price may continue to rise. Traders are shorter than yesterday and last week, and it gives us a combination of current sentiment and recent changes Strong EUR/USD-bullish trade bias.

What is your opinion on it? Euro – Cruel or Cruel?? You can let us know via the form at the end of this article or you can contact the author on Twitter. @niccawley1.