EUR – Euro fluctuates, focus on Thursday's European Central Bank (ECB) meeting

The probability of a rate hike at Thursday's ECB meeting is only about 13%, compared to 78% in September. The market believes the ECB may be more aggressive due to its sensitivity to energy prices. On the other hand, safe-haven demand and energy-driven inflation risks have led the market to fully price in a Fed rate hike before December, with a probability of about two-thirds before mid-September.

The euro edged lower against the dollar on Monday, but managed to hold within the 1.14 range. After initially breaking above the 25-day moving average last week, this level has limited the euro's rebound over the past month. Currently at 1.1420, it will be considered a support level. As long as it continues to hold above this area, the euro is expected to extend its upward trend. Upside targets are expected at the 50-day moving average of 1.1515 and 1.1620, followed by 1.1670, the neckline of a previous double-top pattern. The key level will be 1.18. Support is expected at 1.1370 and 1.1320, with the next level at 1.12.

Forecasted Range:
Resistance 1.1515 - 1.1630 - 1.1670* - 1.1800
Support 1.1420 – 1.1370 - 1.1320 - 1.1200

News Summary
21/7
Germany ZEW July Economic Sentiment Index: 26.3
Germany ZEW July Economic Situation Index: -77.6
Eurozone ZEW July Economic Sentiment Index: 23.4

Focus:
Thursday
ECB Interest Rate Decision (20:15)
Eurozone July Consumer Confidence Index (22:00)

Friday
Eurozone July PMI (16:00)

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