EUR/USD to test the 200-DMA at 1.1678 as tighter ECB policy provides more support – MUFG

The euro has continued to strengthen extending its advance following Thursday’s European Central Bank (ECB) policy update. Economists at MUFG BANK believe that the euro’s bullish momentum is set to continue, allowing the EUR/USD to test the 200-day moving average (DMA) at 1.1678.

Bearish EUR trend set to end

“The ECB’s signal that it is considering raising rates later this year is a game-changing development for financial markets. It helps to explain the big market reaction which we believe has further to run in the coming weeks/months.” 

“A break above the January high at close to 1.1500 should see EUR/USD extend its rebound towards the 200-DMA at 1.1678 and similarly for EUR/GBP up towards 0.8516.”