EUR/USD Surges to Seven-Week High: A Retracement on the Horizon?

8 Mar

The EUR/USD currency pair continued its upward momentum, surging to its highest level in seven weeks, surpassing the 1.09550 mark. However, as it nears a significant supply area, market analysts anticipate a potential pullback or retracement in the price.

Following the March policy meeting, the European Central Bank (ECB) opted to leave key interest rates unchanged, aligning with market expectations. However, the revised economic projections revealed downward revisions to both inflation and growth forecasts for 2024.

During the post-meeting press conference, ECB President Christine Lagarde acknowledged discussions regarding the possibility of scaling back the current restrictive policy stance. Lagarde emphasized the importance of being "sufficiently confident" in reaching the inflation goal and indicated that further data analysis would be necessary until the June meeting to determine the next policy steps.

Despite the Euro's initial struggle to gain traction amidst the ECB event, the widespread selling pressure exerted on the US Dollar contributed to another upward surge in the EUR/USD pair during the latter half of the day. Alternatively, a strong push downward could be witnessed.

As the market dynamics unfold, analysts are eyeing a potential retracement in the EUR/USD pair, targeting around the 1.0800 level. This retracement could serve as an opportunity for traders to reassess their positions and gauge the currency pair's future trajectory amidst evolving economic and policy developments.