EUR/USD: Leaning towards 50 bps hike, a more hawkish ECB should keep euro supported – OCBC

EUR/USD is hovering around parity ahead of the European Central Bank (ECB) meeting. Economists at OCBC Bank expect the ECB to hike rates by 50 basis points. A more hawkish ECB should keep EUR supported.

Resistance aligns at 1.0010

“Our house view leans more towards 50 bps hike though we note that markets are evenly split between 50 bps and 75 bps hike. ECB hawks want 75 bps to be considered at the upcoming meeting and QT debate to commence by year-end. A more hawkish ECB should keep EUR supported.”

“Resistance at 1.0010 (23.6% fibo retracement of Aug high to low), 1.0080.” 

“Support at 0.9910, 0.9850 levels.”

See – ECB Preview: Forecasts from 12 major banks, even 75 bps is too little to lift the euro