The growing tension and confrontation in Europe, as well as massive capital inflow to the US, has put pressure on EUR/USD. It intensified further after the Federal Reserve raised interest rates by 75 basis points and announced a similar one for the next meeting. The central bank reasoned that although inflation is slowing down, it is happening more slowly than expected. Thus, it is necessary to continue raising interest rates.
Interest rate (United States):
Unsurprisingly, dollar became heavily overbought, which means that for further growth, traders needs to release steam in the form of a rebound or a correction. It is possible that this is exactly what will happen today, after the Bank of England raises rates by 50 basis points. Such results will certainly lead to the growth of pound and, given the market's need for a rebound, it will pull euro along with it.
Interest rate (UK):
EUR/USD, in the course of an intense downward move, almost fell to the level of 0.9800. This signals the overheating of short positions in the market, which means that there may be a rebound towards the previously passed level of 0.9900.
GBP/USD has prolonged the current downward trend in the market by trading actively at 1985. This shows that the pair is oversold, and could see a technical rebound soon.
