#EURUSD @ 1.06700 remains sidelined after refreshing six-month high, retreats of late. (Pivot Orderbook analysis)

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• EUR/USD remains sidelined after refreshing six-month high, retreats of late.
• Fed’s failure to impress US Dollar bulls gives rise to hawkish expectations from ECB.
• ECB is likely to announce 0.50% rate hike but qualitative details will be more important for EUR/USD bulls.

The pair currently trades last at 1.06700.

The previous day high was 1.0695 while the previous day low was 1.0619. The daily 38.2% Fib levels comes at 1.0666, expected to provide support. Similarly, the daily 61.8% fib level is at 1.0648, expected to provide support.

EUR/USD relaxes near the six-month high, retreating to 1.0675 during early Thursday, as the pair traders await the European Central Bank (ECB) monetary policy meeting decision. That said, the quote recently cheered the Federal Reserve’s (Fed) failure to impress the US Dollar bulls despite announcing hawkish details.

Fed matched market expectations while announcing the 50 bps rate hike. The US central bank also upwardly revised the dot-plot to suggest 5.1% as the terminal rate, versus 4.6% shown in September’s Statement of Economic Projections (SEP). Further, the Fed revised the inflation forecasts towards the north but the growth estimations were cut down for 2023 and 2024.

Following the quantitative details, Fed Chairman Jerome Powell defended his hawkish image while noting that the ultimate level of rates is more important than how fast they go. The policymaker also added that the Federal Open Market Committee (FOMC) needs to hold rates at their peak until policymakers are “really confident” that inflation comes down in a sustained way.

The market reaction appears mostly downbeat as the US Treasury bond yields failed to respect the hawkish Fed and the stocks also pared the initial losses. Also, the US Dollar Index (DXY) remains pressured around the multi-month low, after refreshing the bottom to around 103.40.

Looking forward, EUR/USD may witness sideways performance amid the pre-ECB anxiety as the looming recession fears challenge the policy hawks. Even so, the regional central bank is up for announcing 50 bps rate hike and may unveil details of its Quantitative Tightening (QT) to favor the pair buyers. The same could help the pair to remain firmer if President Christine Lagarde manages to please the hawks by not stepping back from hawkish comments favoring the higher rates.

Also read: ECB Preview: Five reasons to expect Lagarde to lift the Euro with a hawkish hike

A convergence of the downward-sloping resistance line from September 2021 and 50% Fibonacci retracement level of the EUR/USD pair’s one-year fall during the September 2021-22 period, around 1.0720, appears a tough nut to crack for the bulls amid overbought RSI.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.0674 at the time of writing. Pair opened at 1.0679 and is trading with a change of -0.05% % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.0449, 50 SMA 1.0143, 100 SMA @ 1.0078 and 200 SMA @ 1.0348.

The previous day high was 1.0695 while the previous day low was 1.0619. The daily 38.2% Fib levels comes at 1.0666, expected to provide support. Similarly, the daily 61.8% fib level is at 1.0648, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.0634, 1.0588, 1.0558
• Pivot resistance is noted at 1.071, 1.074, 1.0786

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