Euro fails to continue upswing despite high inflation, hawkish comments from Christine Lagarde

Euro fails to continue upswing despite high inflation, hawkish comments from Christine Lagarde
A lot is happening today on the Euro. First of all, we had the inflation data that surprised rather negatively. The number was a bit lower than the previous month but came above expectations (8.5 vs 8.3% exp). We also got a few insightful comments from ECB’s Lagarde, stating that the 50bp rate hike is still on the table, as the inflation is still too high. Furthermore, she stated that there should not be a recession in the Eurozone and that the interest rates won’t return to where they were two or three years ago. All the statements should be pretty hawkish and bullish for the Euro, but they’re actually not…
In today’s technical piece, I will introduce the situation on the EURAUD. Even though we might be bullish in the long-term, the reaction on today’s fundamental development was rather negative. Maybe this is just the temporary “buy the rumors, sell the facts” kind of a thing. Nevertheless, the situation on the EURAUD is positive. The price managed to protect the 1.535 support (orange) and then climb back above the 1.565 resistance (yellow).

As long as we are above the yellow support, the sentiment is positive and the buy signal is ON. The price dropping below would cancel the optimism in the same way it happened at the beginning of the year. Chances of a bearish scenario are currently slightly less probable.
 
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