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EUR/USD Forex Signal: More Upside as Pressure on ECB Mounts – 23 May 2022

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While the long-term trend is bearish, there is a likelihood that the pair will keep rising as bulls target the key resistance at 1.0675.

Bullish View

Buy the EUR/USD pair and set a take-profit at 1.0675.Add a stop-loss at 1.0500.Timeline: 1-2 days.

Bearish View

Set a sell-stop at 1.0500 and add a take-profit at 1.0450.Add a stop-loss at 1.0550.

The EUR/USD pair moved sideways ahead of key economic events scheduled for this week. The pair is trading at 1.0555, which is about 3.5% above the lowest point this month.

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ECB Pressure Continues

The EUR/USD pair has been in a recovery mode in the past few weeks as pressure on the European Central Bank (ECB) remains.

During the weekend, the German central bank president reiterated that the bank should start hiking interest rates as soon as possible in a bid to fight inflation. The concern is that the weakening euro will make push the rate of inflation higher in the coming months.

The key data to watch today will be the latest German business assessment data by the Ifo Institute. Economists expect these numbers to show that the business climate index declined from 91.8 to 91.4. On the other hand, they expect that the current assessment declined from 97.2 to 95.8. At the same time, business expectations are expected to drop from 86.7 to 83.5.

The main concern among German businesses is that inflation and the overall cost of doing business in the country is rising. The situation will likely continue as natural gas prices keep rising in the coming months.

There will be no major economic data from the US and Europe today. Therefore, investors will be focusing on a slew of economic data and events that are set to happen this week. On Tuesday, Christine Lagarde will deliver a speech in which she will likely talk about the next policy actions by the bank.

Her speech will be followed by another one by Jerome Powell of th Federal Reserve. Like last week, Powell will likely insist that the bank will continue with the tightening pace. Other key data will be the FOMC minutes, US durable goods orders, and US GDP numbers.

EUR/USD Forecast

The EUR/USD pair has been in a slow upward trend in the past few days. As it rose, the pair retested the important resistance level at 1.0600, where it struggled moving above in the first week of the month. The pair moved slightly above the 25-day moving averages while the MACD has moved above the neutral level.

Therefore, while the long-term trend is bearish, there is a likelihood that the pair will keep rising as bulls target the key resistance at 1.0675.

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