EUR/USD Extends Gains Above 1.0600 On Credit Suisse Relief, ECB In Focus

EUR/USD is extending the recovery gains above 1.0600 in the European session. The pair is finding its feet amid a positive shift in the risk sentiment as fears ebb over the Credit Suisse crisis. All eyes remain on the ECB rate hike decision for new trading direction.

EUR/USD was last seen trading in the 1.0620/30 area, where the 50-period and the 10-period Simple Moving Averages (SMA) align. If the pair stabilizes above that region, it could face interim resistance at 1.0660 (static level) before targeting the 1.0690/1.0700 area (200-period SMA, psychological level, static level).

On the downside, the first support is located at 1.0600 (psychological level, static level), ahead of 1.0530 (static level= and 1.0500 (psychological level).

EUR/USD has gathered recovery momentum and advanced beyond 1.0600 early Thursday after suffering heavy losses on Wednesday. The European Central Bank’s (ECB) policy announcements and its approach to market turmoil could drive the Euro’s valuation in the second half of the day.

Flight to safety intensified on Wednesday as news of Credit Suisse’s inability to receive additional financial support from Saudi National Bank revived fears over the financial crisis spreading to Europe. EUR/USD stayed under constant bearish pressure throughout the day and touched its lowest level since early January at 1.0515.

In the late American session, however, the Swiss National Bank (SNB) and the Swiss Financial Market Supervisory Authority (FINMA) said that Credit Suisse met the capital requirements in case it needed to raise liquidity. In turn, EUR/USD managed to erase a small portion of its daily losses before the end of the day and extended its rebound during the Asian trading hours on Thursday.

Reflecting the improving market mood, Euro Stoxx 50 Index opened nearly 2% higher following Wednesday’s 3.5% decline. Later in the day, the European Central Bank (ECB) is expected to raise its key rates by 50 basis points. Earlier in the week, several news outlets reported that dovish ECB policymakers would argue that the changing economic environment would warrant more caution regarding aggressive policy tightening.

If the ECB says that it can change its approach to policy tightening if it sees additional signs of stress in financial conditions in the Eurozone, the Euro is likely to have difficulty finding demand. On the flip side, the bank could downplay market jitters and note that it was an isolated event unlikely to occur again. Markets are likely to expect additional big rate hikes. In that scenario, EUR/USD is likely to remain bullish and extend its rebound.

If the ECB surprises the markets by opting for a 25 bps hike, that will likely trigger an intense selloff in the Euro, at least with the immediate reaction.

This Post Has 7 Comments

  1. e-commerce

    Wow, wonderful weblog structure! How lengthy have you been blogging for?
    you made running a blog look easy. The whole glance of your site is magnificent, let
    alone the content material! You can see similar here e-commerce

  2. Backlinks List

    Hello there! Do you know if they make any plugins to help with SEO?
    I’m trying to get my blog to rank for some targeted keywords but I’m not seeing very good results.
    If you know of any please share. Appreciate it!
    You can read similar article here: List of Backlinks

  3. najlepszy sklep

    Hi there! Do you know if they make any plugins to assist
    with Search Engine Optimization? I’m trying to get my blog to rank for some
    targeted keywords but I’m not seeing very good results.
    If you know of any please share. Thanks! You can read similar article here: Najlepszy sklep

  4. e-commerce

    I’m more than happy to discover this page. I want to to thank you for ones time just for this wonderful
    read!! I definitely savored every bit of it and I have you bookmarked to check out new stuff in your site.
    I saw similar here: Sklep internetowy

  5. najlepszy sklep

    Wow, amazing blog format! How lengthy have you ever been blogging for?
    you made blogging glance easy. The overall look of your web site is excellent, let alone the
    content! You can see similar here e-commerce

Leave a Reply

Important Link

Fund Your Deriv Account
Withdraw Funds to Your Local Currency
VIP Trading Signals
Learn To Trade

Contact Us

Follow Us


Forex, Crypto, Options, and Binary Options have both large potential rewards and large potential risks. Therefore, before investing or trading any of the assets, ensure you are aware of and willing to accept the accompanying risks. Do not trade money you cannot afford to lose.

All Rights Reserved. None of the content of this website can be published elsewhere by any means without the prior consent of the owner(s). Please, check our terms & conditions and privacy policy before continuing to use this website.

This website and its owner(s) are not in any way liable for any incurred loss, whether caused by the information provided on this website or otherwise. The use of this website, including the content and information provided, is the user’s sole liability.