A Hawkish ECB Lifts EUR/GBP
Gregor Horvat | May 11, 2022 03:19AM ET
Markets are slow, with the US Dollar Index trading in a tight range, while US stocks found some support after breaking to new lows yesterday. The reason for a slow down of trading activity is due to important US CPI figures later today, which can be the main driver for the direction going forward as data is important for Fed's policy decisions.
Early today, we heard hawkish ECB comments once again. ECB's Villeroy mentioned that they will start raising rates this summer which prevents traders from shorting the EUR/USD pair today; it's stuck in the range. Instead, some of them can be focused more on the EUR/GBP upside as BOE turned out to be more dovish recently.
From an Elliott wave perspective, we see EUR/GBP changing the direction after five waves down to 0.8200 from where the market rallied out of a downward channel, so bulls are here, possibly for the 0.8660 target in the near term.
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